Im about to order a lift kit for my 2wd 98' xj sport, but Im not sure which axle I have. Im pretty sure its the D35 or the 8.25 but I cant say for sure and I want to be positive. Is there something I can do to help myself here?

 

Yes: post a pic of your axle and we will be able to tell you. Not at my laptop atm, otherwise I could post an overview of the axles.
The 8.25 has a 'flat' lower border/rim, whereas the D35 is more round. Pretty sure someone will post a pic soon of both

EDit: Here you go

 

Google 'Jeep Cherokee axle types' then click on images. There should be plenty of comparisons.

 

This:

 

Cruiser beat me to it.
In fact: it is actually a STICKY!

https://www.cherokeeforum.com/f2/axle-info-148057/

 

Thanks to everyone for helping me out, I gave it a look this morning and mine seems to be a 8.25. Now Ive heard the 8.25 is a bit stronger than the d35, making it a better axle. Is this true?

 

8.25 could be considered an upgrade from the D35

 

Its about a quarter inch thicker right?

 

Yes the C/8.25 is an up grade over the D/35. The C/8.25 is closer to the D/44 in strength, with a larger ring gear than the D/35, your C/8.25 should have 29 spline shafts which are about 25% stronger than the 27 spline D/35 shafts, plus the C/8.25 has a pinion bearing that is about 1/4 inch larger in diameter than the D/35, the C/8.25 also has larger diameter axle tubes.
So yes it is an upgrade over the Dana 35 axle.