I know that this is only skirting the very fringes of folk music but fairy lore, both in folklore and fiction, has always fascinated me.
For the folklore try the books of Katherine Briggs. I'm just re-reading one of her books called 'The Anatomy of Puck'(pub. in 1959)about fairy beliefs in England in the 17th Century - I bought this at a folk festival over 30 years ago - so it sort of counts. She also wrote 'A Dictionary of Fairies'(1976). I'm not sure how easy either of these are to find.
For fictional elves/fairies try 'The King of Elflands Daughter' by Lord Dunsany and 'Lud-in-the-Mist' by Hope Mirlees; interest in these two was revived by the American fantasist Lin Carter, back in the late 60s, and they've gone in and out of print ever since.
For more up to date stuff you've just got to try Jack Vance's 'Lyonesse' trilogy - the fairies in this are magical, mystical, mischievous, malign and both unbelievably strange and borrow from virtually all the fairylore of the past. I have to say that Vance is my 'fave rave of all time' and if you haven't discovered him yet you're in for a treat and I envy you!
You might also like to try two books by Poul Anderson - 'The Broken Sword' (c. 1950) and 'A Midsummer Tempest' (1974). I have always found Anderson a bit of an uneven writer but these two are brilliant. The first is about the elflore of Scandinavia whilst the second is a fantasy set in 17th Century England and draws heavily on the fairylore in Shakespeare.
Finally, also try John Crowley's great fantasy classic 'Little Big'. This is sort of set in modern times (thus contradicting what I said about Charles deLint) but it's so strange and so utterly unique that I forgive him!