In terms of the smoking, it *might* not be as bad as you think. My dad smokes, but he does not smoke in anyone's home, nor does he smoke when my son is outside playing with him. Still, the smoke sticks to his clothes. Since my son LOVES to be held by his poppy, his clothes always smell later-whether it was a two-hour visit or an overnight stay. It's weird, because my parents' home doesn't smell of smoke at all.
I still think you are uncomfortable with the situation and should begin looking for a new caregiver. I wouldn't quit my degree, though. Maybe your husband can casually talk to his boss about their experience with the DCP?