As already stated you need to have adjacent free space to expand the C drive so you need to remove the D drive either by manually copying the files to a newly added 2nd HDD or by using VMconverter to split the drives into two seperate VMDK's while doing so you can also resize the drives.
If it's a windows server 2008 OS then you can extend the C drive from the disk manager tool once you have free space otherwise you need to use disk part after a reboot to adjust the system volume.