D. The relative pronoun is that; it functions as part of the adjective clause.
<em>The pea green sofa</em> is the subject of the sentence. <em>That used to sit in my collage dorm</em> is an adjective clause, because it adds more information and provides a description of that subject, without changing the basic meaning of the sentence. <em>That</em> is a relative pronoun, and these pronouns are used to introduce this type of clauses.