End this. Just end it. You - and especially your poor DH, whose childhood was probably ruined by this woman, enough so that he has tried to keep distant from her to preserve his sanity and the rest of his adult life, despite you undermining him and forcing continued contact (I'm sorry, but you have told us how you've enabled this) - deserve better than to continue dancing to this awful person's tune. Block her number and don't engage any further.
I will say sorry again - but I find it hard to understand why contact has been continued when your DH clearly didn't want it and was troubled by your insisting on its continuance, and your own children have put an end to it as soon as they were old enough to have a say over your insistence and decide for themselves. I hope they have not been too damaged by this woman, and that they are able to repair the misery in their own lives and the distress of seeing their father humiliated, belittled and disregarded throughout their childhoods.
Perhaps they (your children and DH) may find the Stately Homes threads on MN helpful (latest here: August 2024 - But we took you to Stately Homes! | Mumsnet) - and you too, if you are finding it difficult to drop the rope with this woman who is dragging your family down. If you don't end it, you will be consumed by her bitterness, hatred and demands, which are only likely to increase further as she ages. Block her, don't engage any further and end this torment now. At least have SOME happy years free of this despair with your husband before it's too late for either of you.
You are getting a bit of a pasting OP, including from me. 😔 That's probably not nice to read. I'm sure you thought you were doing your best. Look, you can't change the past. No-one can. But you can try and make it right with your DH and adult DCs and influence the quality of the present and your future happiness. Make the future a happier one without MIL. Just block her. You don't owe her explanations, apologies or any headspace whatsoever. She has already cost you so much. Stop it now. Block her number, return any letters unread. Don't let her in and, if needs be, have her removed by the Police if she will not leave you alone. And don't go to the dinner - not even as a "last goodbye" or a "chance to explain". It won't end well. Be prepared for her to ramp up the nonsense as her supply of victims dries up. And watch out for her flying monkeys (well-meaning "friends and relatives" who attempt to intercede on her behalf, either openly or subtly).
Best wishes, strength and courage to you.