On November 22, 1994, about 1500 central standard time, a Piper PA-44 airplane, N853ND, sustained substantial damage during a simulated forced landing at Thief River Falls Airport, Thief River Falls, Minnesota. The certificated flight instructor (CFI), dual student and the one passenger aboard reported no injury. The instructional flight operated under 14 CFR Part 91 in visual meteorological conditions. The CFI reported that he was giving the private pilot multi- engine instruction in preparation for a multi-engine rating. Shortly after takeoff from Thief River Falls Airport, at an estimated altitude of 150' above the ground, the CFI reduced the right engine to idle thrust to simulate a loss of engine power. The private pilot multi-engine student reduced power on the left engine to return to the runway. The CFI stated that the student misjudged the landing flare and landed hard, causing substantial damage to the airplane.