I think your kids are old enough to discuss the matter, but I'd leave it till closer to actually seeing dn.
I think I would say that dn has decided to make some changes to how she looks and is using a new name.
That it might seem confusing when the family sees dn again, because some of those changes are because dn has decided she wants to think of herself as a boy. So her voice might sound deeper and she might have hair on her face from those changes she's made.
No, she isn't a man - people can't change their sex - but this is how she wants to look at the moment. No, you're not sure why, but people do sometimes like to change their name and the way they look.
Emphasise that you'll all try to remember her new name, because that's polite, but it's OK if they forget - they won't get in trouble from you or their Dad. Empathise if needed that yes, it is confusing, but their cousin is still their cousin, that hasn't changed.
Refocus on non-gender parts of the visit, but let the kids know you're happy to help all about it again if they have questions.
It's ok if they ask questions of you you're not sure how to answer. Tell them it's complicated, you'll think about the best answer and let them know.
I think this conversation will be simpler, in the end, than the visit itself - not because of the kids, but because of the hyperfocus the other family is currently experiencing re gender.