I borrowed this from my friend a while back and beat it but it didn't explain what happened to D. I had an item I never used but I can't remember what it was (got it sometime before you enter the house).
It left me thinking I missed something and got a bad ending. So how many endings are there?
Justice prevails. Evil justice.
There are only 2 endings in this one- the good ending, where D recovers all his memories and shares them with you, and passes on afterwards; and the "bad" ending, where he does not remember everything, and simply vanishes, doomed to roam the island forever.
As for not getting an "item" for the bad ending, after reading the FAQs, I don't think that's it.
According to the FAQs, they seem to agree you have to examine certain items to trigger D's memories. These items are known as "memory triggers".
One of the FAQs has a list of the triggers, and also if you want to know, the story behind D's death is listed as well.
Currently alternating between MySims and Animal Crossing: Wild World.