//Controller
public IActionResult Index()
{
            List<DropDownTreeItemModel> ddtData = new List<DropDownTreeItemModel>()
            {
                new DropDownTreeItemModel() { Id = "1", Text = "Option 1", Value = "S1" },
                new DropDownTreeItemModel() { Id = "2", Text = "Option 2", Value = "S2",
                    Items = new List<DropDownTreeItemModel>()
                    {
                        new DropDownTreeItemModel() { Id = "3", Text = "Option 3", Value = "S3" }
                    }
                }
             };
            ViewBag.StateTreeListData = ddtData;
            return View();
}

// View
<kendo-dropdowntree name="StateLocationDropDownTree" style="width: 100%"
                    height="500px"
                    auto-width="true"
                    bind-to="(IEnumerable<DropDownTreeItemModel>)ViewBag.StateTreeListData">
</kendo-dropdowntree>