As I understand it, the current LUNI code on GitHub is about as far as the developers can get (or want to get) without a physics engine. From what I have heard, DLU has received licenses for the Havok® physics engine and thus can develop the server further. I know that at least one developer (Xiphoseer) has switched over to DLU in order to continue development.
Unfortunately, from what I understand, the use of the Havok physics engine means the server itself cannot be released, neither as source code nor as executables (binaries). This means that, although DLU will offer a much more complete playing experience, it will be limited to a select number of players (30-40 is the current estimate), with no option to self-host a server.