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I actually ended up calling Apple support. Tech support was great and problem has been solved. It works... am now using D-Link as access point base router and Airport Extreme as repeater/range extender.
Very straightforward. Used my Macbook Pro to log onto Airport Utility, scanned and found the Airport Extreme base, then just followed instructions on how to join the existing (D-Link) network, typed in password for the D-Link network and everything configured properly.
With the same configuration, I was able to join the DIR-655 network with the Airport Extreme but the wired ethernet ports on the Extreme would not give out dhcp addresses and manually entering the addresses did not work either. Any suggestions?