In sum, you haven't missed much yet, but the pieces are being put into place. Interactive simulation for military training has been under development for more than a decade. A few people have worked in both worlds, but the mindset seems to be to keep them separate. VRML is further along than DIS in ways related to object behaviors, although there is work being done to advance the DIS capabilities in this area. DIS, unlike VRML, does not include a database standard or mechanisms for on-line database transmission.
Most interactive simulation demands lower latency than the Internet presently provides.
While VRML and DIS have obvious similarities, the differences now predominate. Expect to see VRML pressing ahead in issues related to object behaviors and real-time changes in databases. Expect that over time the common ground between VRML and DIS will increase. Expect both to prosper. However, don't expect the two development communities to talk much to each other.