**Core Concept**
Neonatal respiratory distress syndrome (NRDS) is a common condition in premature infants caused by surfactant deficiency. Surfactant is a lipoprotein complex that reduces surface tension in the alveoli, allowing for lung expansion during inhalation. The lack of surfactant leads to alveolar collapse and increased work of breathing.

**Why the Correct Answer is Right**
The correct answer, D. Hyaline membrane and collapsed alveoli, reflects the pathophysiology of NRDS. In the absence of surfactant, the alveoli collapse and become filled with a hyaline material, which is a proteinaceous exudate. This leads to the formation of a hyaline membrane that lines the alveolar walls and prevents lung expansion. The combination of collapsed alveoli and hyaline membranes is a hallmark of NRDS in premature infants.

**Why Each Wrong Option is Incorrect**
**Option A:** Alveolar filled with neutrophils is more characteristic of a bacterial infection, such as pneumonia, rather than NRDS.
**Option B:** Dense fibrosis of the alveolar walls is a feature of chronic lung disease, such as bronchopulmonary dysplasia, which may develop in premature infants who survive NRDS but is not characteristic of the acute phase of the disease.
**Option C:** Enlarged air space is not a typical finding in NRDS, as the disease is characterized by alveolar collapse rather than overinflation.

**Clinical Pearl / High-Yield Fact**
A key feature of NRDS is the presence of a "ground-glass" appearance on chest radiographs, which is due to the alveolar collapse and hyaline membrane formation. This radiographic finding is often associated with a poor prognosis.

**✓ Correct Answer: D. Hyaline membrane and collapsed alveoli**