This is a tricky question that employs some common GMAT traps! This is an inference question, so we're looking for the answer that must be true based on the information in the prompt.
Answer choice C seems to be tempting to a few of you -- but remember, percentages are NOT the same as numbers! Say Judd Academy has a total of 100 alumni, and 10 of these serve in the Air Force. Now, say Knoxville has 50 alumni, and 7 of these serve in the Air Force, 5 in the Army, 3 in the Navy. All of the conditions of the prompt are satisfied: Judd has the largest number of alumni serving in the Air Force, and Knoxville has the most alumni serving in the military. However, Knoxville has a greater PERCENTAGE of alumni serving in the Air Force -- 14% for Knoxville versus 10% for Judd. The GMAT will often try to confuse you with numbers versus percents, so keep your eyes open for this common wrong answer choice.
Now let's look at answer choice D. Again, say that Judd Academy has 10 alumni serving in the Air Force. In order for Knoxville to have the highest number of alumni serving in the military, the school must have at least 11 alumni in the military. However, if 10 or more of these Knoxville alumni serve in the Air Force, then the condition laid out in the prompt that Judd has the greatest number of alumni in the Air Force will not be satisfied. Therefore, some of the Knoxville alumni must be serving in a branch of the military other than the Air Force.
I often find that with number/percent CR questions like this, it can be helpful to approach them almost like a Quant problem -- create potential scenarios by plugging in numbers, testing cases, and trying to prove the statement false!