An in-laws dance is a special dance where the bride dances with her father-in-law and the groom dances with his mother-in-law. You choose one song for both couples to dance to at the same time. You can have the in-laws dance at any point during the reception but I would suggest after the first dance, father/daughter and groom/mother dances.
Choose a song that appeals to all four people instead of one that’s about daughters or mothers. Your DJ (or band) should have recommendations for you.
It’s not a very common special dance so make sure your photographer and videographer are aware that it is taking place and when so they capture it on film.
It’s entirely up to you if you want to have one. Base the decision on the feelings and relationships of all four people involved. For example, if it’s known that the groom and your mom don’t get along you may not want to force them to dance together.