Here's a tip for those of you don't want to have to type all that every single time. Your dosbox.conf file should have a section at the end called [autoexec]. Here's what my autoexec section looks like:
mount c /home/tarvok/dosgames
c:
Of course, you can't use this directly, since you're probably not using linux, but you can use this section to set up dosbox to automatically mount your C drive. If you're convinced Daggerfall is the only game you'll be using Dosbox for, you can also throw that d drive mounting command in there; you can even start the program. If not, there's another way.
Into whatever directory you're using as your C drive, put a file called DAGGER.BAT. Type the following into it:
mount d ~/dosgames/dfcd -t cdrom -label Daggerfall
cd DAGGER
DAGGER
This will mount your D drive, correctly every time, and save you some keystrokes. Basically, DOS (and by extension, Dosbox) will run any file ending in .bat (a batch file), executing each command in sequence.