I'm a single, full time father who is currently living with my parents again, at least until my son starts school. (He is only three atm

I became his full time guardian after social work attempted to intervene, when he stayed with my ex. I was working full time (12 hours/5 days a week) so the arrangement was he would stay the Friday, Saturday and Sunday. He was then dropped off Monday morning. Another group, to do with the flat she and her boyfriend was living in, reported her because the flat was in a state. (I had no idea anything was going on because they tidied before i went to pick him up.) It was also found out later he had been getting left in the cot a lot, in a baby walker that was filthy...They had left poo nappies lying on the floor some places... I honestly cried the hardest i have ever cried when i found out because he used to cry for me when i dropped him off and it really broke my heart.
Anyway fast forward all that time, the stress of everything eventually ended up in me leaving my job. Social work attempted to give her help and this failed.I received a call to say i would need to collect him or they would be forced to put him into care.So he came to live with me and i got legal advice.This was done informally via lawyers and with social work.
Two years later now, she visits twice a week.She has a new boyfriend.She is still not someone i could trust leaving with my son. She doesn't respond to what he says, mostly mimics what he said in question form a lot (Like if he says "Mum, i made a tank", she would say "You've made a tank?") because she is on her phone a lot. She lies, manipulates and acts up to others, pretending to be mother of the year for an audience. She suffers from serious mental health issues, going from what she tells me, she hears voices, sees hallucinations and suffers from delusions. She also seems to suffer from bouts of catatonia, where she just phases out. She hasn't really attempted to seek out help.
When she last visited, she asked if we could go meet her boyfriend and his small cousin. I got annoyed because she has also, earlier that day, trying to introduce him to my mum. It seemed to me like she was trying to bring him into the fold. The guy she is going out with has issues also. He suffers from ADHD, anger issues and seems to have learning difficulties.This is not me being judgemental and it was none of my buisness but i flipped because she said "He asked if ****** would come play football?" and implied 6 months is a "serious relationship". I told her my mind, that he didn't sound like the kind of person he should be around and other things.She went in a huff and made me feel like the bad guy.
So we went. Turns out it wasn't just him and his cousin. His mum, auntie and family was there too. So it looked like it was set up from the start. Then the "mother of the year" act came on.I met his common-as-much, swearing around a kid, smoking around kids, insulting innocent strangers family.
Now i send her a text today in reply to an apologetic message. She ended up saying she "is working towards having him go with her on her own and maybe even stay with her in two years time". She also threatened me with court action. Now i know, in terms of my son, i am going to come out on top. The only issue is, before all this, i looked at her as a friend and told her a lot of things via email, secrets etc. She has a lot on me and could potentially try and blackmail me. I love my son to death and i would give anything up for him.I gave up a lot for him. I stopped smoking, gave up a great deal of my social life, gave up the gym and other things i used to enjoy. I would do it all again. She gave up nothing. She smoked all the way til he was born and kept smoking after.
I feel like i'm stupid for trusting her and feeling pity for her. She seems like a monster. What do i do?