I need some advice ( or sense talked into me. ) Sorry, this is going to be a little long so you can see my side.

I go back to work in January, we've found a daycare that I'm really excited about for my two littles. ( they will be 2.5 and 1 at that time.)
This daycare works with flex schedules ( I work a rotation so it's extremely hard to find care that works for us.) I've heard great things about the program. They also teach a second language and sign language. It's expensive at $65 / day per kid. We will be booking 8 days of care a month, and then will have 2-3 days a month where we will try and find family to help or I'll use vacation days or my husband will work a split week. The daycare as great hours and is very conveniently located to our house and my husbands work. ( He will be doing drop off and pick up.)

Now, I have an extremely strained relationship with my MIL. I don't like her. Period. I don't like her attitude, her personality, ugh, anything. The only good thing I can say, is she generally means well. She is extremely jealous of the relationship that I have with my mom ( she only has boys.) She is very jealous that my kids see my family more than they see her. My husband gets very stressed out around his mom as well and generally doesn't really like being around her, so neither one of us go out of our way to hang around her.

Now, after MIL had a tantrum at my daughters second birthday ( she was mad that my sisters were invited and originally we hadn't invited dh's brothers due to space issues and they never see our kids.. but in the end we did invite them so her tantrum was completely unwarranted. But that's another super long story) Dh had a big talk with her and explained some things of why we aren't as close to her as we are to my family. Part of the reason is she doesn't live in the country for half the year. Every year her and her husband leave from Oct (ish) to April ( ish.) So DH explained that with her being gone for so long, it's hard to have the same relationships. Cue her visit last week. She tells DH ( I wasn't here) that she's decided that this year, she's going to come back in January. Conveniently just as I go back to work. Now she says we don't need to put the kids in daycare as she will be here. DH apparently told her that she doesn't need to come back to watch our kids, that we have plans. She said she wasn't coming back for that, but to spend more time with her family, but as she will be here, she can watch them. DH told her he would talk to me about her watching the girls while I work.

It's not that I just don't like my MIL, it's that she always has some crisis going on in her life. She doesn't work because apparently she suffers from PTSD. She's been on long term disability for this for a few years. So, she claims she can't work, but she's capable of watching a 2.5 year old and a 1 year old and is fine?
Her being here and her husband being at their other home will no doubtly cause massive tensions in their relationship. ( She's not been down with him before and they were always on the verge of divorce while not together.)
She always thinks she has some kind of severe medical issue. ( I can't remember the number of times ( like probably 4 times at least) she's said she 'may' have cancer to have it turn out to be a UTI or some other normal health issue.)

So now Dh thinks we need to take her up on her offer to watch the girls and save the $1000 of care. I said I would 100% rather have the girls in daycare then her watch them. It's already agreed that I will pay for their daycare. It will make things a little tight, but not unmanageable to have them in daycare. I also hate the idea that they will be stuck inside with an adult during the winter months while they could be socializing with children.

Am I insane for preferring to pay $1000 a month for care when we have an option to have free care? What would you do? There's a lot more issues I have with my MIL but would rather keep them out for privacy sake.