If your sister had died before your mother, then she--or her children--would not inherit when there is no will; it would all go to you (and any other surviving siblings you had, if there were any). But your sister outlived your mother, so part of your mother's estate (your sister's half share, assuming the two of you were the only children) went to her (she had a write to it, even though probate was not done)--and then when she died, what she owned or had an interest in or right to, including what she was inheriting from your mother, went to her own heirs and beneficiaries, which would presumably be her children. So yes, it appears that in this case, your sister's share now goes to her children.