The difference between C & D is the distance from the bottom edge of the circle and the base in choice C, compared to the distance from the bottom edge of the of the square cut out and the base in choice D.
Choice C has the same distance between the circle base and bottom of the shape that would be represented in the front view of the shape provided. It's a really tough question and I don't think such a small detail would show up on the DAT, however I don't create the test, so who knows.
If you put the mouse pointer on the front view, lining the bottom of your mouse up with the bottom of the figure, you can see how much space is between the dash mark and the bottom of the drawing. Then compare the spacing of C and D by using your mouse pointer at the same position. There is a difference, it's small, but there is a difference. Thats the way I see it anyway.