Oops!

I can't believe I did it, but I added the DME into the muslin bag with the grains and steeped for 20 minutes. It's been a while since I brewed, I can't believe I did this. Is this gonna be a big deal in the end?

Use a strainer to remove the dme.

I meant the grains. Use e strainer to strain out the grains.

Sadly, I didn't realize what I had done until I was done steeping. Boiling wort as we speak

Your OG might be a little low due to the grains absorbing some of the dissolved DME sugar.

Yep, my OG was 1.038

You can increase the OG by adding more DME if you have some left. I would dissolve it into a small amount of boiling water to pasteurize it first, then cool and dump it into the fermenter. Not ideal but a way to recover.

Before you do this step, make sure that the measured OG is the real OG. Using malt extract and a partial boil it is really easy to be misled on the OG because when you add the top off water it doesn't want to mix well. Try stirring the wort really well with a long spoon (sanitize it first) and then check the sample again.