I don't consider this subset Democrats at all, but rather Republican politicians that for varying reasons (including infiltration) have registered as Democratic, their group started when Koch Industries gave funding to the DLC and served on its Executive Council

http://www.correntewire.com/why_its_feature_not_bug_koch_family_funds_dlc

One member of the DLC's executive council is none other than Koch Industries, the privately held, Kansas-based oil company whose namesake family members are avatars of the far right, having helped to found archconservative institutions like the Cato Institute and Citizens for a Sound Economy. Not only that, but two Koch executives, Richard Fink and Robert P. Hall III, are listed as members of the board of trustees and the event committee, respectively--meaning that they gave significantly more than $25,000.

Shortly after their Koch connections became well known they re-branded as "Third-Way" or "new" Democrats and most of their economic blueprints were transferred to the new Third Way website (Although they still keep the DLC think tank Progressive policy institute around to push free trade and cuts to SS and Medicare)

These third wayers are proudly pro corporate, unyieldingly free trade, and rabidly anti "entitlement"
their standard policy hope is to cut SS, they have been promoting it since the 80's.
They are responsible for past ftee trade agreements under Clinton, the destruction of welfare, and the end of bank regulations that led to the recent crash. You can easily guess what the next false flag attack on citizens will be (while posing as Democrats) simply by reading their website: http://www.thirdway.org/

A very thorough recent post by MadFloridian on this false flag group of republicans: http://www.democraticunderground.com/10022497884 (a must read)