**Core Concept**
The question is testing the concept of genetic transfer in bacteria, specifically the role of bacteriophages in mediating DNA exchange between bacterial cells. This process is a key mechanism of horizontal gene transfer, enabling the spread of genetic information between different bacterial species.

**Why the Correct Answer is Right**
The correct answer, **transduction**, occurs when a bacteriophage (a virus that infects bacteria) accidentally picks up some of the host bacterial DNA during its replication cycle and transfers it to the next bacterial cell it infects. This process can result in the transfer of genes between bacterial species, potentially conferring new traits or antibiotic resistance. The bacteriophage acts as a vector, facilitating the movement of DNA from one bacterium to another.

**Why Each Wrong Option is Incorrect**
* **Option A:** This option is not a recognized term in microbiology or genetics related to genetic transfer in bacteria.
* **Option B:** While conjugation is a method of horizontal gene transfer in bacteria, it does not involve bacteriophages.
* **Option C:** Transformation involves the direct uptake and incorporation of free DNA molecules from the environment, not the transfer of DNA mediated by a bacteriophage.

**Clinical Pearl / High-Yield Fact**
It's essential to remember that transduction can lead to the spread of antibiotic resistance genes between bacterial species, contributing to the emergence of multidrug-resistant pathogens.

**Correct Answer:** C. Transduction.