I am a former special needs teacher. He is not exhibiting true dyslexia because then he would be be reading bat for tab, etc. He is substituting one word for another. I would definitely get him tested by the school. Try having him "frame" the words as he reads them. Have him put his fingers around the word so that only that word shows. Then move on to the next word. If he is successful with that, have him try phrases. Also, have you had his vision checked?