This is another classical example in which the pumping lemma is the wrong way to go. Here are two cheap alternatives.
Use the Myhill–Nerode theorem. For any $i \neq j$, the words $1^i$ and $1^j$ are inequivalent, since $1^i\#1^i \notin D$ while $1^i\#1^j \in D$. Since there is an infinite pairwise inequivalent collection of words, the language is not regular.
Use closure operators. If $D$ were regular, then so would $\overline{D} \cap 1^*\#1^* = \{1^i \# 1^i\}$ be. Now it's easy to use the pumping lemma.
It's also possible to use the pumping lemma directly. Suppose that the pumping length is $p$. Take $w = 1^p\#1^{p!+p} \in D$. According to the pumping lemma, we can write $w = xyz$ so that $0 < |xy| \leq p$ and $xy^iz \in D$ for all $i$. Let $y = 1^q$, so that $1 \leq q \leq p$. Choose $i = p!/q + 1$. Then $xy^iz = 1^{p!+p} \# 1^{p!+p} \notin D$, contradiction.
The trick of using factorials here is standard. Now that you've seen it, you can use it whenever it's needed.