Try this:
Get-ADUser -SearchBase "OU=Quarantined,OU=Accounts,DC=Contoso,DC=com" -Filter { displayName -like "1*"} -Properties displayname |
ForEach-Object {
$d = $_.displayName -replace "^1", ""
Set-ADObject -Identity $_.distinguishedName -Replace @{displayName="$d"}
}