D-modules are related to flat connections on vector bundles, end hence local systems. The theory of D-modules (and related notions such as crystals etc.) seems to be a popular in complex analytic geometry, real analytic geometry, and algebraic geometry. However, it seems to me (as an outsider) that the literature on D-modules does not treat the case of smooth manifolds.

I have a few related questions:

1. Are D-modules a useful notion in the smooth manifold setting? I realize that the sheaf of smooth functions on a manifold is soft, but I would hope that doesn't make D-modules over smooth manifolds uninteresting.
2. If so, is there a good reference that discusses D-modules in the smooth manifold setting?
3. Is the theory of D-modules useful for studying flat real vector bundles and their corresponding local systems on smooth manifolds?