Thank you Moo.
I did tell DD7 to find other kids to play with for the rest of the year.
I think you're right about the manipulation part. It seems that when DD7 tries to play with other kids that's when classmate is nice to her.
After school one day I'm cleaning out her backpack. There's always something interesting in a 7 yr old's backpack. This day was no different. I pull a good size chunk of asphalt out of her backpack. Yes you read that right, asphalt.
I standing there confused and said...
ME: DD7. Why do you have asphalt in your backpack?
DD7: because classmate was going to throw it at good friend and I stopped her.
Me: Why didn't you put it in the woods or another part of the playground?
DD7: Because I didn't want her to find it and throw it at him so I brought it home to throw it away.
I guess another question should have been how did she bring it through the school to her classroom and get into her bag with no one seeing it.
I'm going to give the teacher one last chance, then I'm going to the principal. I try to go through the "chain of command" but this is ridiculous.