Sorry, BMM, I missed your earlier reply, somehow.
Yes, by OS I mean "Operating System", i.e. Windows 95 in your case.
It looks to me that there is no problem: if your D: drive is 99% empty it's not going to need defragmenting. Quite why the Defrag tool thinks it does is a question for Mr. Gates.
Bigears - a lot of people recommend setting your own VM up to be a fixed size. In this case, it ain't broke and I wouldn't try to fix it.