Thanks for clarifying, CrazyH!
I'm so glad this row didn't occur while the children were around. But since DIL ended up crying and is still upset w/ DS, it seems to me this was more than a "little niggle."
I get the idea of spouses supporting each other in public even if they disagree in private. But if DS felt that DIL was seriously bullying his sister, I can see why he may have felt he had to act in the moment. Since you tell us that DS generally doesn't get along w/ DD and yet he still defended her, I imagine he felt very strongly that DIL was in the wrong. IMO, it would have been better to try to change the subject or pull DIL aside to ask her to let the issue go or whatever. But, of course, I wasn't there, so don't really know.
If this was an isolated incident, then, hopefully, then I, too, am sure DS and DIL will "patch things up" and put it behind them. But if DS is in the habit of siding w/ his sister over his wife, then this is probably a larger issue. I just hope it doesn't continue to affect you.