You can definitely grant levels to a DK. You can't summon the DK out of the starter instance until after the quest with the Battle of Light's Hope Chapel. Before that, I got an error message saying something like, "You cannot leave until you have escaped the clutches of the Lich King!" When I got back to Ebon Hold after that quest, and before I turned in the next quest, I was able to summon out my DK. I was 57, very close to 58 by then, so I granted 3 levels. Got a fabulous "How the hell are you 61 already?!?!" whisper from another DK.