Modulational instability (MI) is explored in the framework of the base-rotor model of DNA dynamics. We show, in fact, that the helicoidal coupling introduced in the spin model of DNA reduces the system to a modified discrete sine-Gordon (sG) equation. The MI criterion is thus modified and displays interesting features because of the helicoidal coupling. In the simulations, we have found that a train of pulses is generated when the lattice is subjected to MI, in agreement with analytical results obtained in a modified discrete sG equation. Also, the competitive effects of the harmonic longitudinal and helicoidal constants on the dynamics of the system are notably pointed out. In the same way, it is shown that MI can lead to energy localization which becomes high for some values of the helicoidal coupling constant.