Busy as I am, I just had to look that up. Read the whole statement.
In essence, the VFW said that the DHS is doing its job and that it made no blanket accusation of that every soldier was capable of being a terrorist; but that they were not pleased with the wording of the report and "hopes DHS tones down the disgruntled military veteran angle in its next edition, and includes other professionals who have paramilitary training, such as the police, Secret Service, FBI, and DHS' own Immigration and Customs Enforcement agents.".
No "blanket accusation"? I'm not so sure. Here's a paragraph from pg. 7 of the DHS report:
So did VFW really defend the report? You decide.
(U) Disgruntled Military Veterans
(U//FOUO) DHS/I&A assesses that rightwing extremists will attempt to recruit and radicalize returning veterans in order to exploit their skills and knowledge derived from military training and combat. These skills and knowledge have the potential to boost the capabilities of extremists—including lone wolves or small terrorist cells—to carry out violence. The willingness of a small percentage of military personnel to join extremist groups during the 1990s because they were disgruntled, disillusioned, or suffering from the psychological effects of war is being replicated today.