We report a novel highly spin-polarized deuterium (SPD) source, via the photodissociation of deuterium iodide at 270 nm. I(P23/2) photofragments are ionized with m-state selectivity, and their velocity distribution measured via velocity-map slice imaging, from which the D polarization is determined. The process produces ∼100% electronically polarized D at the time of dissociation, which is then converted to ∼60% nuclear D polarization after ∼1.6 ns. These production times for SPD allow collision-limited densities of ∼1018 cm-3 and at production rates of ∼1021 s-1 which are 106 and 104 times higher than conventional (Stern-Gerlach separation) methods, respectively. We discuss the production of SPD beams, and combining high-density SPD with laser fusion, to investigate polarized D-T, D-He3, and D-D fusion.