I'm sorry, but it seems to be me who's the first to say this, but
First off, please look up some statistics online (child "porn" (yes, I heard all the stuff), levels (what I learned - TODAY - about levels 4 and 5 made my blood run cold)).
Read everything you can - ignorance is a luxury nobody can afford at this juncture), Gather this information and FORCE it onto your MIL, including the concept that you can muck about on the internet for decades and not just "stumble across" any of this, let alone the really bad stuff.
Her reaction will be interesting$, but that's not the main thing you need to think about.
What is, is this: Statistically speaking, child abusers are not born, they're made. And in the vast majority of cases, it's a family member.
You have said nothing about FIL - is he perhaps not on the scene any more? Whether dead or divorced, perhaps his presence is no longer an issue. And even if it was him [and he's no longer in the picture] you may not be home&dry, you've still got your MIL's minimising$ to deal with.
$because: that's the easiest scenario; I'm sorry, it's not always the father, sometimes it's the mother.
And, I'm further sorry, but in an abuse situation, it's almost never one child and not the other(s).
To ratchet if back a bit, even if your DH was abused it's not necessarily the case that he'd 'deal with it' the way your BIL did - indeed, DP and I were thrilled to bits that DH has not just given up information that MIL specifically asked him to keep from you (i.e. he that he has broken the "code"), but that he has also volunteered the newspaper information. OK, rational people will say that you'll just pick up a paper anyway, but that's the point - your DH seems to be rational.
Finally, to those who are all "ooh, she's just coming to terms with this", she's have TEN F*ING YEARS BETWEEN THE PREVIOUS CAUTION AND NOW to come to terms with it, and has not. Indeed - given that there is no such thing a trial that has just sprung up overnight - she would have had at least months to deal with things.
If she's been given the truth about anything. That said, there's that thing about the specific-police/social worker that makes me wonder.
On a more practical note, I agree that if you possibly can, you should move and maybe even change your name (hey, why not change it to yours?).
Please, look after yourself and your DCs.