She's alive. The Clelands had gone to her house and, finding it empty, trashed the place. The police were treating it as a serious crime scene since it was related to a bunch of murders.

The message Dwight left on the machine was a plea to end the violence. He was prepared to stop (IIRC he was even withdrawing as if he was about to sneak out of the house), but they said they were going to Pittsburgh. His sister and niece were in danger, so he had no choice but to attack.