Working with a W2. Business based in Maryland. Living in DC. Box 15 "State Employer's state ID number" begins with "DC xxxxxxxx". State tax was withheld for MD or DC?

DC.  The code in box 15 DC means that the tax withheld was applied for DC taxes.  This is correct for you.  You do file a DC return since you live in DC.  Maryland does not tax you because of the reciprocal agreement that exists between Maryland and DC residents.