They show up like that. They cover their planet with industrial sectors, nothing else, and starts building those nasty ships. So initially they will be easy to defeat and I have often seen them surrender as soon as war was declared on them simply because they had no ships yet. Haven't played the beta for a while though so I don't know if that is still the case.

I had the DL show up in a game when I didn't know where the planet was that they colonized. Took me about a year and a half to get to a point where I could go looking for them, luckily they were otherwise occupied warring with the Torians and Iconians and Alterans. About when I started looking, they made peace treaties so I started to get worried that they'd come after me.

I found them, some ways away from my space, with the Torians (the leaders and an ally) between me and them. They had fully built up with Industrial Sectors and had about 4 of their attack ships with some massive numbers (stacked doom rays and lots of PD). At the time no one had researched beam tech or defense, so I had to spend time on that b4 building any ships that could stand to take them on. Another 2+ years later (about), I was ready (including the time to get a couple of those slow Lucky Rangers to their planet that I had been lucky enough to aquire).

To keep them from building up in the interim, I just slammed a bunch of money into espionage and dropped 7 spies on their Industry blocks. Put the kybosh on them quite well until I could come over, blast them, then spore them (didn't want to bother with a ground invasion, cause I hear their insane to beat).

Just saying, even after they come in and get a good build started there is a way to defeat them with espionage tactics.