Here are a few of the common questions and the real world answers regarding SCVMM, domains and domain controllers:
Scenario #1 : VMM server is in Domain_A and there is a member server that is in a workgroup that you want to add as a managed host. Will this work?
Answer: Yes. Add the member server through the Add Host wizard using the option for 'perimeter network' and SCVMM can manage this host.
Scenario #2 : So now we have this member server that is part of a workgroup being managed by VMM, but now we want to join it to Domain_B. Will this work?
Answer: Yes. Joining this server to Domain_B will not impact VMM being able to manage this host.
Scenario #3 : Now this server is a member of Domain_B and working just fine, but we would like to promote this member server to a Domain Controller, can VMM still manage this server as a managed host?
Answer: Yes. You can promote the member server in Domain_B to a DC and VMM will still be able to manage this host.
Scenario #4 : Will VMM work if I upgrade the server where SCVMM is running to a Domain Controller?
Answer: No. Before starting the upgrade you'll need to first uninstall VMM. Once the upgrade is complete you can then reinstall VMM Server. *
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VMM and Domain Controllers - RULES AND GUIDELINES
1. A server that is a member of a workgroup can be added as a managed host.
2. That server can then be joined to any domain and VMM will still function normally.
3. That server can even be promoted to a domain controller and VMM will still function normally (exception is RODC).
4. You cannot promote the VMM server to a domain controller without first uninstalling VMM and then reinstalling after the promotion.
* It is NOT RECOMMENDED to install VMM on a domain controller. Computers functioning as domain controllers should be reserved for domain administrative functions.
Maheshkumar S Tiwari edited Original. Comment: Added tags and minor edit