The correct option is C Everybody's here but the police.
We use but as an alternative to except (for), apart from and bar to introduce the only thing or person that the main part of the sentence does not include. It is often used after words such as everyone, nobody, anything, anywhere, all, no, none, any, every.
But is used as a preposition when we put a noun or pronoun after it.
Option D is correct. It means that everybody's present except for the police. The noun 'the police', which also acts as the object of the preposition 'but', sits after it.
Option A is incorrect because the meaning is not in sync with the intended meaning of the two sentences. There is no noun following 'but'.
Options B and C are incorrect because their meanings are completely different.