CONVAIR 600, N94258, WAS ON A FLT WITH A COML PLT IN THE L SEAT & A CFI IN THE RGT SEAT. THEY ENTERED VFR TFC FOR ILS APCHS TO RWY 34. THE COML PLT WAS USING A HOOD; THE CFI WAS PROVIDING SIMULATED ATC VCTRS FOR AN APCH. A DEVELOPMENTAL CTLR (D/C) WAS CTLG TFC AT THE FTW ALLIANCE ARPT UNDER SUPVN OF AN INSTRUCTOR. D/C ADZD THE PLTS TO MAINT VFR & THAT SEPN SVCS WOULD NOT BE PROVIDED. AS THE CONVAIR WAS IN A CLOSED/RGT PATTERN, THE PLT OF BEECH B19, N9343S, CTCD THE TWR FOR APPROVAL TO TRANSIT THE AREA FM SE TO NE. THE B19 PLT WAS CLRD THRU THE AREA AT OR BLO 2400' MSL. SUBSEQUENTLY, THE 2 ACFT CONVERGED & COLLIDED AT AN ALT OF ABT 2000' MSL. IMPACT OCCURRED AS THE B19 WAS ON A HDG OF 060 DEG & THE CONVAIR WAS IN A RGT TURN TO INTERCEPT THE ILS FINAL APCH COURSE. THE B19 PLT SAW THE CONVAIR JUST BFR IMPACT & TRIED TO AVOID A COLLISION; THE CONVAIR PLTS DID NOT SEE THE B19. AFTER IMPACT, THE CONVAIR WAS LNDD WITH A DMGD HRZNTL STBLZR. THE B19 PLT WAS FORCED TO LNDG ON ROUGH TRRN. THE ATC CTLRS HAD NOT NOTIFIED EITHER CREW OF THE OTR ACFT'S PSN.