My brother is pretty dyslexic (I am only VERY MILDLY so) and in second grade, his teacher told him couldn't read because he was stupid. Then the school put him in special ed for his third grade year.
It was a blessing. She taught him how to deal with dyslexia (and then he taught me) and all through the rest of school, he pulled almost straight A's.
Good for you and good for your kids for doing so well!!!