Go to http://www.earthworkshealth.com/
I plan on picking some up locally also. Good video. Not sure I would eat it though.
In short, It kills insects without doing it via chemicals. It is all natural. Just make sure it is food grade.
Some is used in pools. This is not what you want!
The DE won't kill your flies, but if the poop is dried out, the flies won't be drawn to lay their eggs in it. Also, hanging vanilla scented car trees does seem to repel flies.