I would use the DNG. Although not the ideal situation, C1 will still 'develop' the RAW DNG file better than just a tif.
I agree with Mike, Raws (even DNGs) offer more original information than a semi-processed TIFF image. While the conversion of some DNGs in Capture One is not ideal, it may be workable until Phase One irons out the issues with DNG conversions.
Converting to DNGs may be useful in some Adobe-centric workflows, but tossing the original Raws is a sin (or at least not a wise thing to do). There's a large world outside of the Adobe bubble, eh cloud ...
Cheers,
Bart