Use it liberally! Sprinkle it into carpet, under baseboards, on upholstery… under the sofa, on your mattress (after stripping the bed, and before making it up with fresh bedding). I would not skimp on the amount that you use in the carpeting; you may want to leave it down for at least 5-10 days, brushed into the carpet, before you vacuum.
Apply it directly to the pets; mine seem to like it if I dip my hands, wearing cotton knit gloves, into the DE and then massage them all over. You may need to reapply every week for at least two weeks.
Be sure to treat the dog, too! Treat all the rooms in the house. Your infestation is severe in the living room, so treat carpet and upholstered furniture especially aggressively. Use lots, put it everywhere, leave it for a few days. It’s messy, it’ll look like you bombed your living room with flour – but it works and it’s non toxic. If you’re bathing the kitties every other day, then be sure to treat them with DE as soon as they’re dry.
(DE will not work anywhere that is wet, or where it gets damp.)