I dont think its making it down to the laterals.

Rather I think its filling the "gaps" between sand crystals, making the whole system "finer" in filtration. Ive read some people say its a coating along the top of the sand itself, that might be too (Ive never opened up my filter after adding DE to check)

Im with you though, all I know for sure is that it works I just backwashed my sand filter this morning so Ill need to add some more back in but the water does end up clearer. I think its a great middle ground between keeping the ease of use of a sand filter and getting DE-like (but not quite the exact same) filtration from it.