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In this article, we report the systematic studies and correlations of the microstructural, magnetotransport and magnetic properties of Dy28Fe72 granular thin film, which has been prepared by dc magnetron sputtering at room temperature. The structural properties showed that the distribution of grains was uniform throughout the film and the average grain size of Fe and Dy particles was measured to be ~ 2 nm. The magnetoresistance [MR] increased from 3 to 18 % with decrease in temperature from T = 300 to 4.2 K and we have obtained a maximum of 18 % of MR at T = 4.2 K. The MR and magnetization curves have not saturated even for very high fields (H = 9 Tesla) and at all temperatures which was essentially due to the superparamagnetic (SPM) particles. SPM nature of the film was also inferred by corroborating the field dependence of magnetization and MR. [ABSTRACT FROM AUTHOR]