I am sure I have read somewhere how a character can craft thier own armour, I can no longer find it so does anyone know where I can find info on crafting armour, the item I read was using an annis hag it makes hide armour with DR.
Hey I found the source it is a PDF on Druids and Druidism it explains how druids would seek specific animals to use as armour, they need an animal 1 size category bigger than themselves (a medium size creature needs a large size animal). The book is a 3rd ed and is a mine of information for druids, the annis hag I mentioned gives a DR of 1 but has a +5 rating.
One point of DR for a +5 equivalent bonus (for pricing purposes) is an extremely poor trade.
Instead, you might consider slapping the "Invulnerability" special ability on your armor. It grands DR 5/magic for a +3 equivalent bonus, though if you face a lot of monsters whose attacks are treated as magic, it won't really do much. Still, it can be quite handy when dealing with hordes of mooks.
You might suggest to your DM that he take a look in the Draconomicon, specifically at how dragonhide armor and shields are done. He can use those as guidelines for pricing.
I'm inclined to think your annis hide armor would offer DR 1/bludgeoning as a nonmagical bonus. It would have to be of masterwork quality, but the DM should assign an extra cost for the unusual chemicals needed to properly treat the hide (aka balance the price).