Ruth,
I don't know anything about dwarf babies, but the stuffy nose set off my
alarm system. I have found that babies with stuffy noses--without other
symptoms of a cold--very often are intolerant of dairy in their mother's
diet.  The signs that very often signal this diary intolerance are any
one/combination of these:  a baby who sounds stuffy when it breathes,
even though you never see any mucus coming out of the nose; if the baby
spits up it is already separated into clear liquid and curdy stuff, not
like breastmilk that just went down; a baby who screams for no reason and
putting to the breast or other comforting measures don't help, the scream
is somthing you want to do something about right away because it is so
disturbing.

If mom cuts all visible dairy from her diet it still takes 10-14 days for
it to clear her system.  In other words she probably won't see results
right away.  But a couple weeks down the road she "has a different baby".
 My last three were all dairy intolerant as babies, even though neither
my husband or I have any allergies.  My 14 yo son is still a mouth
breather--health professionals when they examine him say he has hardly
any opening in his nasal passages, they are so swollen.  I'm sure it's
still dairy, but he refuses to cut it out of his diet.

If this mom has started baby on other foods, she might want to make sure
none of them are dairy-based and hold off on dairy foods of any sort for
at least 12 months.
Hope this is a help.

Pat Bucknell, IBCLC
Avon Lake OH--where it was raining tonight, then 2-3" of wet, wet snow,
now melting