She is just that his sister,she is no relation to you at all.
However, in the purest sense, she too is a "relative-in-law" and therefore could, by mutal conesnt between the two, be considered your daughter-in-law.
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We don't have a specific word for this kin relationship in English. If you think of your daughter-in-law as being like your own daughter, then her sister would be like your daughter too, and in that case the sister's son would be like your grandson. I have never heard anyone use the term "grandson-in-law," but it's possible to use such a word. I would use it if I had a relationship with this boy (in some families the mother-in-law might not ever even meet this relative). Otherwise, "daughter-in-law's sister's son" is the only way to precisely describe it.