You'll need a Dixie Youth rule book for this one.
Batter is awarded 1st on B.O.B. Runner over-runs
first and is imediatly returning when he is tagged.
Umpire calls the runner out. It this the right call?
OBR and NFHS says he's out Dixie says he's a runner
and doesn't care how he became one. Am I missing
something?

Under FED, he's out.

Under OBR, he's allowed to overrun first.
7.08: Any runner is out when: (c) He is tagged, when the ball is alive, while off his base. EXCEPTION: A batter-runner cannot be tagged out after overrunning or oversliding first base if he returns immediately to the base.

Check your Dixie book and see if that falls in there somewhere; we switched to Cal Ripken here about 5 years ago and I haven't seen a Dixie Youth book in some time.

Guess what,

Dixie 7.08:c reads almost exactly the same as OBR!