In the 6 years I've been using OM as a customer I've found dfm backup backup / restore to be the best option.
I've used it to migrate between different Windows O/S and used it to migrate a database between a existing system and a new system running a later version with no down time to the existing system.
If you use the OM for configuration management the only thing I've found to be missing for the database backups is newer configuration templates you may have installed after deploying a version of ONTAP that was released after the version of OM you are running. Everything else seems to come across including Performance Advisor data (should you use that component).
Another plus of the restore process is it upgrades the database schema when restoring into a later version of the application and maintains all the historical data.
I can't really talk to your second option as I've never tried it or used the command, so this will come over a biased pro backup / restore thumbs up !!
Hope this helps.
