And I'm not even talking about paying talent. Let's just say he has a bunch of friends that will do everything (acting, CGI, basic crew work) for free. This isn't unheard of for something so short.
The software ALONE to generate CGI on that level is more than $300. You can't do that kind of work in something like Adobe After Effects or Apple Motion. Hell, animating something in Photoshop (painful) wouldn't look this good and it still costs more than $300. This requires something like Shake or IFF stuff... then you have to have the hardware to run it on.
Also there is NO way the camera he's using is some cheapo point and shoot DV or even HDV cam - the quality and frame rate look almost film like. I've seen high end DV and HDV cams, all of which are above $300, and they still don't look this good after proper lighting and post-production color matching/tweaking.
You can do plenty of stuff on shoe string budgets these days but I don't think it's scaled down to QUITE this level yet.