Create a custom class to perform the filtering work on the data that you need. Expose a bindable property for the data provider of each grid.
To restrict the number of children, you can loop through an manually remove them.
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It seems to me some creative use of GroupingFields and SummaryRows might work. I assume this is for a "drill-down" kind of grid, where users can click twisty arrows for a little more detail, or click the actual entry for a LOT more detail.
If you populate your hierarchical datagrid with your summary data, and make the final level in the hierarchy a callback to a function that creates your flat datagrid, that could work. It's labor intensive, but theoretically possible.
I've had to do something similar. For my system, I set up the heirarchical datagrid in an ADG with my Summary Rows as above, and create an invisible GROUP or CANVAS for the detailed dataGrid. When a user clicks on a cell, I use the itemClick event to fire off a second HTTPService request to get the detailed data, populate the GROUP/CANVAS, and then make it visible.
I'd recommend splitting your data source into multiple HTTPRequest (or equivalent) calls. Unless your dataset is reasonably small, loading the entire dataset into the grid at once will really slow down scrolling and other interactions.