Short answer to your question - You're not doomed yet. Your BTEC sounds like a good start, But what you do next really matters, and to be honest, it's all down to being able to motivate yourself to getting your technical skills up to scratch, and making the most out of the rest of your HND while there's still time.
Do you know what it is about the HND which is causing you and your classmates to struggle? Is it an issue with the teachers? the course itself? the exam board/certification board?
I'd think that you still have time to turn things around if you're willing to put in extra work to catch up and teach yourself the things which you're having difficulty with. Everyone else on your course sounds like they need to do the same, but you don't need to worry about them. If the problem is that your tutors/lecturers don't know what they're doing, then look into finding some relevant material online, particularly videos and e-books, and dedicate some time every day to catching up. There's plenty of free stuff out there for IT, but "google digging" takes some work.
Most importantly from a job perspective, How are your overall technical and IT skills?
As far as IT recruitment is concerned, a university degree is a typical 'benchmark' for entry-level technical knowledge. Whether you have the degree or not, employers will insist that you prove you're up to a certain level before they're willing to trust you in a technical job. This is simply because employers usually don't have the time and money to spend training somebody from scratch unless it's an unpaid apprenticeship (and even then, employers usually want to see some proof that their time and effort in an apprenticeship won't be wasted - I imagine you can understand they want people who are willing and able to work hard and 'learn hard'.).
Internships and Junior/Graduate jobs are near the bottom of the ladder as far as technical ability is concerned - you don't need to be an expert at anything, but you do need to be a good problem solver, and someone who can be given small tasks to work on by themselves, do the research themselves, try things out, learn from mistakes, etc.
Unfortunately, sometimes people find themselves being given technical jobs that they can't do or don't want to do; they struggle so much that they just stare blankly at the screen all day doing no work, or they sit at their desk bored, playing computer games, on their phone, facebook, etc. No employer wants somebody like this, so they're careful about who they employ - If you don't pass the HND, and don't re-take your final year to complete it, you might have a challenge convincing them that you won't be "that" type of person (Again, I'm sure you can understand why).
In reality, graduates leave University with a lot of technical knowledge gaps, and every company will have all kinds of things it wants you to learn on top of a University degree. Employers always expect a junior employee to learn a lot in the first 12-18 months of an entry-level technical job, the reason these companies ask for a degree is to prove that they are capable, competent, IT-literate, technically minded problem solvers - if you can prove that some other way, then most of them won't care whether you have a degree/HND/etc.
If you struggle through education, but you have the ability to demonstrate that you're competent working with IT, that you understand fundamental computing concepts, are competent in skills such as IT system configuration, tech support/administration, SQL databases, networking, etc, And you can show that you've got strong problem-solving skills, then employers (especially those in smaller companies) are often quite willing to hire somebody who they can feel confident is capable at doing the job, and is enthusiastic, willing to learn, shows a positive attitude/maturity, good "people skills", etc.
Part of this comes down to the fact that they won't offer a whole lot of money in the first couple of years (realistically, expect less than £20k salary until you've got some solid experience behind you - everybody starts somewhere. Assuming you succeed in a job like that, then a degree would be irrelevant to your career after 3-5 years anyway.)
While you're still on the HND, you're in a perfect position to try and build up your technical profile - ideally you should try to do this while working away at your coursework, studying for exams, etc. If you can make a good attempt at your final-year HND project, then this would make a good showpiece. It really depends how much work you put in yourself between now and the end of your course.