We introduce the Dropstone D3 Engine, an architecture designed to solve context-saturation in long-horizon engineering tasks. By virtualizing cognitive topology and enforcing a separation between probabilistic generation and deterministic state, D3 reduces compute costs by 99% compared to homogeneous swarms. As reasoning chains extend beyond 24 hours, agents relying solely on sliding-window attention encounter significant performance degradation. We identified three primary bottlenecks: Instruction Drift (models de-prioritize initial system prompts as intermediate reasoning tokens accumulate), Context Economics (the O(N²) cost of attention renders massive windows economically inviable), and Stochastic Error Propagation (logic errors accumulate probabilistically, leading to hallucination cascades). Unlike standard RAG pipelines which retrieve context based on semantic similarity, D3 enforces a rigid separation of memory manifolds based on functional utility. The system distinguishes between Active Workspace (volatile, high-fidelity) and Latent History (compressed, causal). Sequential Memory stores transition gradients between states, allowing the engine to replay decision logic without re-reading verbose text. Reliable autonomous engineering requires a Deterministic Envelope around the probabilistic core. The D3 runtime prevents invalid states via a layered security stack: L1 Syntactic Validity (zero-latency AST integrity check), L2 Static Analysis (integration with industry-standard linters for SQLi, buffer overflows), L3 Functional Correctness (automated assertion injection), and L4 Property-Based Testing (stochastic fuzzing for edge cases). Since D3 relies on code execution for verification, we utilize a Defense-in-Depth strategy. All verification occurs within ephemeral, network-isolated sandboxes with kernel-level syscall filtering to prevent unauthorized resource access. The system treats every generated artifact as potentially hostile until verified. The D3 Engine demonstrates that general intelligence in software engineering is limited not only by model parameter count but by the fidelity of state management. By formalizing a memory topology that separates reasoning from retention, we bridge the gap between probabilistic text generation and deterministic engineering standards. D3 is available now in Dropstone Enterprise.