When a fungus reproduces sexually, two haploid hyphae of compatible mating types come together and fuse. In some fungi, the fusion of two haploid cells immediately results in diploid cells (2n). However, in other fungi (ascomycetes and basidiomycetes), an intervening dikaryotic stage (n + n, i.e. two nuclei per cell) occurs; such a condition is called a dikaryon, and the phase is called dikaryophase of fungus. Later, the parental nuclei fuse and the cells become diploid. The fungi form fruiting bodies in which reduction division occurs, leading to the formation of haploid spores.
The following steps take place in case of fungi like Agaricus
These fungi are found as long strands of individual cells. These strands are called hyphae and are located in dirt or on their food source. Each cell has one haploid nucleus.
The hyphae encounter the opposite mating type. So the hyphae come in + and — types.
The cells of opposite type fuse together with each other so, one + cell fuses with one -- cell. This yields a cell with TWO nuclei. The nuclei are different. So this fused cell, and the fungal parts derived from it by mitosis, are “dikaryotic”. Di means two, of course, so dikaryotic means two nuclei.
The dikaryotic cell grows and divides to make new dikaryotic hyphae. The hyphae grow together to make a cup-like structure that is visible on trees, dead logs, etc.
In a few of the eukaryotic cells of the cup, the two haploid nuclei fuse. This yields a diploid cell.
The diploid cell will undergo meiosis to generate haploid spores that will be dispersed in the environment. The spore cells grow into new haploid hyphae.