The correct answer is option 'B', Heterocysts.

Heterocysts are specialized cells found in the filamentous cyanobacterium Nostoc. They are responsible for fixing atmospheric nitrogen into a form that can be used by the organism.

Explanation:
1. Filamentous Cyanobacterium Nostoc: Nostoc is a filamentous cyanobacterium commonly found in soil, freshwater, and marine environments. It is capable of nitrogen fixation, which is the conversion of atmospheric nitrogen (N2) into ammonia (NH3) or nitrate (NO3-), a form that can be utilized by living organisms.

2. Specialized Cells: Nostoc filament consists of a chain of cells, and among these cells, there are specialized cells called heterocysts. Heterocysts are larger and thicker-walled than other cells in the filament.

3. Nitrogen Fixation: Heterocysts have specialized enzymes called nitrogenase, which can convert atmospheric nitrogen into ammonia through a process called nitrogen fixation. Nitrogen fixation is an energy-intensive process that requires ATP and the enzyme nitrogenase to break the strong triple bond of nitrogen gas (N2) and convert it into a usable form.

4. Anaerobic Environment: Nitrogenase, the enzyme responsible for nitrogen fixation, is highly sensitive to oxygen. Heterocysts create a microenvironment that is low in oxygen by thickening their cell walls, reducing oxygen permeability, and producing specialized pigments called heterocyst-specific glycolipids. This anaerobic environment within the heterocyst allows nitrogenase to function properly without being inhibited by oxygen.

5. Transfer of Fixed Nitrogen: Once nitrogen fixation occurs in the heterocysts, the fixed nitrogen (ammonia) is transferred to neighboring cells in the filament. The transferred ammonia can be assimilated into amino acids and other nitrogen-containing compounds, which are essential for the growth and development of the organism.

In conclusion, heterocysts are specialized cells found in Nostoc that are responsible for fixing atmospheric nitrogen. They create an anaerobic environment, allowing the nitrogenase enzyme to function and convert atmospheric nitrogen into a usable form for the organism.

Nostoc is a cyanobacterium. It has the ability to fix atmospheric nitrogen. It converts nitrogen into ammonia. The heterocysts present in it are specialized for nitrogen fixation. It contains enzyme nitrogenase. Nitrogenase is inactivated by oxygen. Hence, the heterocyst creates a micro anaerobic environment.