I don't mean to come off as an elitist or anything but if you want to become a good fighter, you have to be trained by professionals. With your current situation you don't have good sparring partners. Your friend (William I think) will be learning at a better rate than you because he actually has difficulty against you guys.
Keep doing what you are doing but you need to be going to an MMA gym atleast once per week, then you can practice what you've learned in the lesson and film it. You won't just be randomly practicing you will be improving specific parts of your game.
Best of luck.
Blue Belt from a DVD? I don't think that's IBJJF certified..