From the website
“For the purposes of this Law, a citizen of the Republic of Serbia shall be understood to mean also any citizen of the SFRY who, on 27 February 2005, was a citizen of some other republic of the former SFRY or of some other state emerged in the territory of the former SFRY and who has registered permanent residence in the territory of the Republic of Serbia for at least nine years, if he/she submits a signed statement that he/she considers himself/herself a citizen of the Republic of Serbia and has filed an application for being entered in the register of citizens of the Republic of Serbia.
Citizenship of the Republic of Serbia based on origin is acquired, under different conditions, by children if both or one parent is a national of the Republic of Serbia at the moment of the child’s birth.
If grandfather could be considered a citizen of SFRY at the time of birth of his child, then that child may apply for cizitenship by origin now (?) There’s nothing about grandchildren applying for citizenship by origin. Only by admission.
Immigration lawyers is best consulted on the subject.