I suspect your son may not have learnt boundaries or to respect women because you have been so easy on him, perhaps a little tough love would have gone a long way to helping him to understand it is not okay to abuse others, and to take away his safety net means that he faces up to the consequences of his actions. If you do not allow this to happen, even as he hits nearly forty years of age you are setting him up to fail in life in general.
You are keeping secrets from your dh, tell him exactly what has happened to your DIL, why are you still covering for him in this way? He is not a child op.
Then write a letter to your DIL and tell you know everything, and how sorry you are that this has happened to her and the children. You owe her an acknowledgement at the very least.
I would ask him to leave, I would give him to the first of January to find a proper job so he can support his children, and somewhere else to live. He can not keep sponging from you, you are not helping him op.
What happens when you die? And he has not mummy safety net. It is time to be firm, tell him how upset heartbroken you are learning of the truth, enough is truly enough, and encourage him to book an anger management course. It is imperative that he is able to pull himself together now.
You have done a huge disservice to your grandchildren choosing to support your abusive son over them. Really. The only support you should have been offering is to them. How truly horrific for those children to suffer like that.
Put it right, and make sure from now on you do not allow this violent man to continue to hurt others by making his life so easy he can continue to pile his energy into stalking and scaring his own children.