As such I must very much advise against using Dynamic Disks. If you're sure you want to proceed, just right-click on the drive area (to the left) in Disk Management and select the conversion option. Convert both drives. You can then extend your volume D: with the free space on drive 0. Again: Make very sure you want this.
1. Just go into Windows OS and then go to Disk Management. From there it should allow you to expand/extent any unallocated space to the existing disk partition at the Window's OS level. At the Hyper-V level, it's been expanded, but at the Windows level it has not, so you should see it as unallocated space at the OS level which you should be 0 Unallocated space on drive comes when drive lost its file system and unable to locate data location in the storage drive. There is only one option to resolve this issue is by clean formatting of the drive. Either you can format the drive by going to the disk management or use diskpart to clean the drive and redefine the file system. Boot your usb, press shift10, type diskpart, list disk, select disk 0 (after verifying 0 is correct), clean. Then close cmd, click through the language selection etc, once you get to the drive selection click on the create partition button, make it a smidgen smaller than the full drive, then click next through the rest. Method 2. Fix unallocated USB disk with Disk Management. Proceed to the distribution of free space on a flash drive. This is easy to do this way: right-click on Start. A list will appear on the right; click on Disk Management. In a new window, select the bad USB flash drive with the right mouse button. Click Create Volume. You should also have the BitLocker recovery key ready to be used if you don't do this. "but is that space still part of the C drive?" - It will be unallocated space at the end of the disk. You will be unable to extend your system disk using that unallocated space since it's at the end of the disk (second screenshot). - Ramhound. uCJIun.