Distilled vinegar is 95% distilled water, I suppose. By not diluting it, it just means there is a bit more acid to be neutralised before freebase DMT is liberated, with a marginally increased amount of base required. This can be determined mathematically.
If your local water supply is not too excessively hard it should be possible to use that instead of distilled water. Dissolved salts should be of relatively little consequence considering salt is added after acidification anyhow. If concerned that magnesium and calcium salts from the water supply would interact adversely with the base, bear in mind that these metal ions are present in plant material already.
So yes, while you can use straight up distilled vinegar you might as well dilute your vinegar somehow. Rainwater will do if you're concerned about hard water and really can't find or produce distilled water.
Producing distilled water is as simple as boiling a saucepan with a lid and collecting the condensation by having the lid slightly askew, although this would be pretty inefficient for large amounts.