INS (Inertial Navigation System) is a generic term for whatever tells you where you are with respect to some reference frame (no system uses a truly inertial reference frame, but that's another rant!). Swap "System" for "Unit" and you've got an INU - an equally generic term. Any "strap down" navigation system that uses rate gyros and accelerometers takes some amount of time to "align" to ensure the attitude and position that it reports is as accurate as it can be (or at least, within spec). Flight Gear has a pretty good wiki-style article on INS systems here http://wiki.flightgear.org/Inertial_Navigation_System .

The Ka-50's doppler system (if that's what you're referring to by "DNS") determines the Ka-50's velocity relative to the ground, but would not be sufficient for a complete navigation system. I believe this system's output is used solely by the auto hover system (and the HUD, which reports the measured ground-speed in the upper left).

The Doppler system does the auto hover and ground speed (HUD speed) stuff. It almost sorta kinda works like a computer mouse, looking down and tracking the picture of the ground below. It's only interested in lateral and longitudinal translation.

The INU is the 6-degree accelerometer/gyro set that knows what's happening without any "windows" to the outside world. INUs are so cool because you can turn them on and the fact that they are parked on a rotating planet gives enough acceleration to figure out local "up", north direction, and latitude. Longitude has to be supplied.

In real life both have a warm-up or alignment time. Some minutes on the Doppler system and 15-30 minutes on the INU. In DCS the INU is instant (zero delay) and the Doppler is 3 minutes. If you take off in less than 3 min after turning on the K-041 power you'll notice you don't have a ground speed readout on the HUD and if you try to engage auto-hover some/all of the AP channels so deactivate and blink and the helicopter becomes very exciting very quickly. You can takeoff before the Doppler is ready but be sure not to ask auto-hover of it before it is. Also it needs a "history" so you'll notice even a fully prepared Doppler system will not provide info until some scenery has passed below it.

I think you can fly the Ka-50 without an INU alignment. The stabilization channels should work fine. You won't have gyro heading reference or any PVI-800 navigation functions.