An organization prepares to migrate to Office 365. The organization has one domain controller named NYC- DC1 and one server named NYC-DS that is designated
as the directory synchronization computer.
The organization has the following servers:
You plan to upgrade the servers to support directory synchronization.
You must upgrade each server to meet only the minimum requirements by using the least amount of administrative effort.
You need to ensure that you can use the Windows Azure Active Directory Sync tool to synchronize the local Active Directory with Office 365.
What should you do? Select the correct action from each list in the answer area.
Answer: 
Explanation:
Func. level of 2003 is minimum, as the OS for dirsync must be minimum 2008 (no r2). http://msdn.microsoft.com/en-us/library/azure/jj151831.aspx