At least not according to DS1 ... he came back from a birthday party on Sunday to tell me that DS2 had 'had sex' with a girl there. DS2, and the girl, are both 3.
I think they kissed. I know they didn't really have sex, or anything like it, but we were all quite about it!
According to DS2, he kissed his friend a bit, but they both got bigger and then she turned into a boy, and he doesn't want to kiss boys, so he stopped kissing her, and then they both went back to a normal size. Any attempts on my part to get a more ... sane? ... explanation get me the answer 'it's just a story'.