Born in UK to British mother prior to 1961

I've never quite fully understood the birth to a British mother from 1961-1983 clause, but that's what DH used to get his citizenship last year.  I have a couple questions about his siblings and their children: 

#1.  Children born in England to a British mother (U.S. father) prior to 1961.   Are they citizens?   

#2.  The children of the above mentioned children in #1 who are now all over 18 years of age.  Are they eligible for citizenship? 

I believe the answer to #1 is yes, if they were born to a British mother on UK soil they would be British citizens 'other than by descent'.

As for #2, that's a bit muddier.  When were they born?  (Prior to 1983?)  Was it their mother or father who was British?  Were the parents married at the time of birth, or have they subsequently married?

For the children in #2, there are two situations: 

a.  Born to a Father from #1  in the U.S. prior to 1983 and yes, the Father and Mother were married. 

b.  Born to a Mother from #1 in the U.S. prior to 1983 and no, the Mother was not married. 

It appears that the home office (ind) site is down at the moment so I can't double-check, but...

...here is a synopsis of the nationality law re: citizenship 'by descent' from Wikipedia:

Prior to 1983

Prior to 1983, as a general rule British nationality could only be transmitted from the father through one generation only, and parents were required to be married.

With effect from 30 April 2003, a person born outside the UK to a British mother may be entitled to register as a British citizen by descent if that person was born between 8 February 1961 and 31 December 1982. However those with permanent resident status in the UK, or entitled to Right of Abode, may instead prefer to seek naturalisation as a British citizen which gives transmissible British citizenship otherwise than by descent."

So...it appears that child (a) is automatically a British citizen by descent, and could apply for a British passport.  Child (b) would fall under the same rules that your dh (and I!) fell under, and would need to register as a British citizen 'by descent'.  Interestingly, it doesn't appear that there needs to be a 'legitimized' marriage for a mother to pass on citizenship under these rules, while there does need to be for the father to pass on citizenship.

(Disclaimer - I am by no means an expert in this, just an interested party....)