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Little fungi look for all the world like tiny birds' nests. The fruiting bodies form little cuplike nests which contain spore-filled eggs. The nests are called "peridia" ("peridium" in the singular), and serve as splash cups; when raindrops strike the nest, the eggs (called "periodoles") are projected into the air, where they latch onto twigs, branches, leaves, and so on. What exactly happens next is not completely clear, but eventually
Growing in mulch in residential yard.