I don’t think it’s a good idea to advocate divorce on the basis of a few posts, but this doesn’t sound like a great situation.
About the kids: like everyone else, I think kids of 11 and 9 (even a developmentally delayed 9) are old enough to be doing more for themselves. They can get themselves cereal and entertain themselves for an hour or so while you sleep a while. An eleven-year-old boy can easily learn to make French toast, eggs, muffins, cookies, quesadillas, smoothies, and lots of other easy dishes–and do his own laundry besides. I know it’s hard (I’m a SAHM myself, I live it too), but in the long run you’re not doing him any favors. First, try some cooking classes; teach him a few things. Then, it may be time to get tough; if you refuse to fix any more snacks, and tell him to get his own breakfast, it won’t hurt him to go hungry for a couple of hours while he learns that yelling will no longer get him what he wants. By giving in to complaints and whining, you’re only encouraging him to misbehave–you know that, but it’s hard to steel yourself for the horrible few days it will take to correct the wrong course he’s on. But if this continues, he will always expect someone else to feed him.
Their constant fighting: what have they got to do this summer? Does the local community center offer any classes or sports? Distraction sounds good. Also, you could get a few books on power struggles and fighting from the library, and try some of the strategies in them. Going on an anti-fighting program may help them learn: for example, whenever they pick fights, they might have to put a dollar in the jar, or lose privileges such as video games or TV (TV often makes kids grumpy anyway). Or they can make up the time you lose in refereeing by doing jobs for you.
As for MrDragon: On Sundays, when he does maintenance, what’s stopping you from taking off for a couple of hours? Can the kids help him out, or entertain themselves?
If he won’t stand up to his family (DangerDad’s comment was that real men do not let this kind of thing happen, btw), then I think you should just remove yourself and the kids from them. I don’t care if they’re his kids, too; it’s damaging to them, and if he won’t do anything to rectify the situation, then you have to do what you can. Besides, cutting off access to the grandkids might have an effect on your MIL, you never know…
For you: OK, you have no education and not much prospect for good employment. IMO you should start taking classes at the community college while the kids are in school. Get an AA in something–anything to improve your prospects and yourself. Then you’ll be able to get a better job, and employment will become more feasible. If you do wind up divorcing MrDragon, you have to have some way to support yourself, and you don’t have that. You are not in a good position to strike out on your own, and I hope you will be able to do something about that; every woman should have something she can do to support herself. Divorce sucks up a lot of money, and the woman usually winds up poorer than before. Prepare yourself for that possibility.
And, once again, I hope you two have some sort of date night thing worked out. If your marriage is going to survive, you need to spend time together relaxing and finding out what makes the marriage worth working for. Especially, he needs to realize what he stands to lose; far too many men don’t figure that out until it’s too late.