The correct answer is option 'B' - Bridge operates in the Data link layer of the OSI model. The Data link layer is the second layer of the OSI model and is responsible for providing reliable and error-free communication between two directly connected nodes on a network.

A bridge is a networking device that operates at the Data link layer and is used to connect two or more network segments together. It is designed to forward data packets between different segments based on the MAC addresses of the devices connected to each segment.

Below is a detailed explanation of how bridges operate in the Data link layer:

1. Data link layer:
- The Data link layer is responsible for the reliable transmission of data over a physical link between two devices.
- It is divided into two sublayers: the Logical Link Control (LLC) and the Media Access Control (MAC) sublayers.
- The LLC sublayer is responsible for flow control and error checking, while the MAC sublayer is responsible for addressing and accessing the physical media.

2. Bridge operation:
- Bridges operate at the MAC sublayer of the Data link layer.
- They have multiple ports, each connected to a network segment.
- When a data packet is received on one port, the bridge examines the MAC address of the source device and adds it to its forwarding table.
- The forwarding table is a database that maps MAC addresses to the corresponding port on the bridge.
- When a data packet needs to be forwarded to another segment, the bridge looks up the destination MAC address in its forwarding table and forwards the packet to the appropriate port.
- If the destination MAC address is not found in the forwarding table, the bridge floods the packet to all ports except the incoming port, allowing the destination device to receive the packet and update its forwarding table accordingly.

3. Benefits of using bridges:
- Bridges help to reduce network congestion by dividing a large network into smaller segments and only forwarding packets that are necessary.
- They also improve network performance by preventing unnecessary broadcast traffic from being transmitted across all segments.
- Bridges can also increase network security by isolating network segments and preventing unauthorized access.

In conclusion, bridges operate in the Data link layer of the OSI model. They provide reliable and error-free communication by forwarding data packets between different network segments based on MAC addresses.