There are two branches in nuclear research: weapons and power.
Early on in the Nazis' research, Werner Heisenberg miscalculated* the critical mass necessary to produce a workable bomb, placing it at around one ton. Largely as a result of this, research on weapons production was halted. Hwever, it is entirely possible that research on power poduction continued on. Who really cares how heavy a fixed reactor core is?
*Or he mislead the Nazis for political or moral reasons.
Jeremy Bernstein makes a good argument that the Nazi scientists were unaware of the true value of the critical mass, let alone other important but less basic issues such as the significance of prompt vs. delayed neutrons, until they learned, while being detained in Farm Hall, of the bombing of Hiroshima (Hitler's Uranium Club: The Secret Recordings at Farm Hall, ISBN 978-0387950891). These recordings of their conversations among themselves indicate initial astonishment and incredulity, but after several hours (days?) of work, Heisenberg was able to present to the group an analysis of how it could be done. Bernstein argues that that Heisenberg's initial back-of-envelope calculation for the critical mass, based on the mean free path of neutrons in uranium, was never questioned. While they may or may not have found this useful in discouraging Nazi hopes of an atom bomb, it seems unlikely that they were aware it was wrong.
They also incorrectly measured the neutron absorption cross-section of graphite (IIRC due to contamination by boron) and ruled it out as a moderator, making themselves dependent on vulnerable heavy water supplies from occupied Norway.
According to Thomas Powers' book, 'Heisenberg's War: The Secret History Of The German Bomb' (written before the Farm Hall transcripts were released), creating a power reactor was indeed their assigned task, but the Third Reich had more pressing priorities, so it was never funded in the way the V weapons were. If they had tried to build a reactor on the basis of Heisenberg's assumption, they would probably either have irradiated themselves out of existence, or found the errors in their theory. Either way, it does not seem likely that they would have been in a position to be so astonished by Hiroshima as they evidently were, if they had made much progress in that direction.