Actually, you were very articulate. 
My child is old enough to make his own decisions, however unwise or self destructive. All I can do is be there to support and care for DC, and to advise and to mitigate when DC allows me to. DC is a responsbile adult (well all right he's a bit bonkers too!)
Two images - one for you and one about your husband. What you are doing for DD is throwing out a lifeline to her, which she can grab or not. You can't make her grab it, you're just letting her know it's always there. If she swims away, you throw it again, just so it's always close enough to grab. So if she sinks she can always pull herself back up.
It might be a bit different for your DH. His relationship with DD sounds more difficult, he swings from absent to obsessed, and I guess there's a long history behind that. I think he needs to build a more solid foundation to his relationship with DD. He needs time with his DD, shared, positive. That's what you are already trying to build, but is he? That's the foundation under the building and without that he's not going to achieve anything. The trans stuff is only the roof of the building. Anything he tries to build without that foundation of enjoyable relaxed time spent together will collapse.
And you can't build his foundation for him. Either he does it himself, or it doesn't exist.
I realised that DH and I had let DS drift off from us. DS didn't run away he left home in the usual way of things, but he can be quite emotionally closed and we didn't make enough effort to visit him and keep contact. We only realised when he told us about the decision to transition. So we have to rebuild the connection. Yes DH and I are panicking like fuck about it, and yes it's a strain on our
relationship (I'm GC, DH is more .... um trans positive ... though he's equally horrifed about DS(!)) We are both trying to strengthen the foundations of our relationship with DS, and keep our lifeline out. And apart from the closeness itself, another payoff so far is that DS is seriously considering an important mitigation that we've advised. It wont stop his transition but might at least maintain his fertility.
he says we are being too passive and being loving to DD isn’t working.
Then DH is being impatient and rather foolish. What doe he think "working" would like? DD coming home with her tail between her legs? And is that at all realistic?
It's natural to feel adrift and miserable. We're in uncharted waters. You said you were seeing a counsellor yourself? If you are, then keep going, it's good to have someone who's there just for you. And honestly - you're doing a great job.
DH suggests dumping all our daughters stuff at their flat, to scare the mum ( it’s small) and scare DD. Maybe?
No, I wouldn't. Because how would DD interpret that? "Fuck off then, and live with these people"? Just because DH is upseet and angry, he doesn't get to lash out at DD.
The last thing on earth you want to do is scare DD. She's scared enough already. Her behaviour screams "anxiety" to me. She needs to see home and parents as safe, loving, accepting, calm. Yes I know we have to fake the "calm" bit but that's why a counsellor is great, I don't have one at the moment but in the past I've used counselling as a safe place to fall apart, rage, vent, grieve, say horrible things, knowing it wont hurt anyone else. And came through to find a way forward that helped me and my family.