Work place problem possible discrimination what should I do?

If your company is a reputable one they will have a "Standards of Behaviour" policy, if they do look up harment and bullying section. Your DM is being racist and this is against the employment law. You need to find out who your DM's superior is and have a word with them either informally and get their advice or formally in writing asking that it is treated as confidential, especially about the comment that "the next one will be white" this is clearly racist.