Are you doing this in Marketo or Salesforce? If in Marketo, click "Add Choice" and say if State equals DC, then choose the correct owner. If Salesforce, you need to update your Lead Assignment Rules to reflect this change.
Creating the flow in Marketo. There is no "DC" value to assign.
Can you post a screenshot? We are assuming you mean if State=DC, then assign to Rep that covers DC.
If that's true, then you have to do what Jason suggested:
Sync Lead to SFDC: Add Choice, IF State=DC, then Assign to Owner
But if DC isn't showing up in the picklist, that's ok - just type it in. Maybe it's not in your SFDC picklist yet.
But maybe you mean "DC" is something else?
Agree with Josh and Jason. Marketo should like the "DC" value, but just to be sure, type "DC" into the value for state and click outside the box. If it's not underlined in red, you should be good to go. Of course, I'd recommend testing just to make sure.