Yes, D can quit claim their interest to anyone including C or even A or B.
As to the second question, if there was some sort of operating agreement created at the time of purchase, that document may spell out how to sell an interest. If not, then yes any one of the partial owners can sell their interest to either an owner on the DOT or even an outside party. Note, however, that the market value of a 1/3 interest is not 1/3 of the market value of the home. Check with a real estate appraiser who is experienced with these types of properties to get the true value.