Its not possible add public folder as members of DL in Exchange 2003. This can be only done from Exchagne 2007.
Throught Exchange 2007 you can add both throught Exchange management console and Powershell command
Powershell command
Add-DistributionGroupMember -Identity “DLName” -Member “Email address”
Exchange Management console
Expand Recipient Configuration -> Distibution Group -> find the requied DL -> Add the same