A school official made horrible derogatory degrading and sexual accusations remarks about my daughter and myself to her schoolmate and his mother at school. Can you file defamation of character?

This is a very tricky thing, because if you try this it could back fire and they could counter sue. I would first make an official complaint to the principle. If it was the principle then I would get in contact with someone from the school board. Make sure you tell them who was present. I would be p.. I mean ticked off if this shappened to my wife and daughter. Good luck.