This is purely anecdotal, but from what I've seen a lot of Americans (at least around me) aren't too concerned about NK targeting cities (we live near DC).
Now I'm sure the government is taking this pretty seriously, but I don't see the same throughout the citizens. There are obviously exceptions, but generally it's the opposite.
From what I know, NK has an outdated arsenal (which, IMO, is not the whole story behind military strength) and the USA is [apparently] leagues above them. I'm not exactly sure how much of this is war propaganda, but I'm sure it isn't exaggerated too much.
[b] TL;DR:[/b] Is NK being underestimated by the general public? How much damage do you think they could inflict?
Well, I'm relatively uneducated regarding this subject, so please excuse any ignorance I may have shown.
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Doesn't matter how great their arsenal is. All it takes is for them to fire one nuclear bomb--no matter how outdated it may be--and then it's possibly game over for the entire world. Any nuclear state is a serious threat.