I'm guessing they're referring to "DMT entity" as a metaphysical entity and not a shared hallucination? Otherwise, seems pretty rational actually. DMT has been used a long time in South America in the form of Ayahuasca, it wouldn't be surprising if there were religious entities inspired by it.
"Machine elves" are a general term for a type of hallucination. There isn't a shared hallucination of a specific god of machine elves. Especially not with specific traits.