The correct option is
D The way they produce spores
Based on the spore case in which the spores are produced fungi are classified into four divisions.
Division Ascomycota: Sac fungi - The sac-fungi produce spores in small cup-shaped sacs called asci, hence the name Ascomycota. The mature sac fungi spores are known as ascospores, they are released at the tip of the ascus breaks open. For example, Aspergillus, Claviceps, Neurospora.
Division Basidiomycota: Club Fungi - The spores are borne on a club-shaped spore case called basidium. Huge numbers of spores are produced by the club fungi. For example, Agaricus (mushroom), Ustilago (smut), and Puccinia (rust fungus).
Division Zygomycota: Zygote forming fungi - They are zygote forming fungi, hence the name Zygomycota. The spores are produced in a round-shaped case called sporangium. These fungi are usually found in cheese, bread, and other decaying food. For example, Mucor, Rhizopus (the bread mould) and Albugo.
Division Deuteromycota: Imperfect fungi - These organisms are known as imperfect fungi because they lack sexual reproduction. They reproduce by asexual spores known as conidia. Most of the fungi cause diseases to humans like ringworm, athlete's foot. Economically important imperfect fungi are Penicillium and Aspergillus. Hence option D is correct.