The bending of double-stranded(ds) DNA on the nano-meter scale plays a key role in many cellular processes such as nucleosome packing, transcription-control, and viral-genome packing. In our recent study, a nanometer-sized dsDNA bent into a D shape was formed by hybridizing a circular single-stranded(ss) DNA and a complementary linear ssDNA. Our fluorescence resonance energy transfer (FRET) measurement of D-DNA revealed two types of conformational states: a less-bent state and a kinked state, which can transform into each other. To understand the origin of the two deformed states of D-DNA, here we study the presence of open base-pairs in the ds portion by using the breathing-DNA model to simulate the system. We provide strong evidence that the two states are due to the emergence of local denaturation, i.e., a bubble in the middle and two forks at ends of the dsDNA portion. We also study the system analytically and find that the free-energy landscape is bistable with two minima representative of the two states. The kink and fork sizes estimated by the analytical calculation are also in excellent agreement with the results of the simulation. Thus, this combined experimental-simulation-analytical study corroborates that highly bent D-DNA reduces bending stress via local denaturation.