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 very 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?
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?

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.