1. Identify amino acid $y$ from reaction with nitrous acid

A primary amino acid on treatment with aqueous $\mathrm{HNO_2}$ gives the corresponding $\alpha$-hydroxy acid:

It is given that $y$ gives lactic acid, whose structure is:

So the parent amino acid must be:

which is alanine.

Thus,

2. Identify amino acid $z$ from the cyclic product on heating

On heating, amino acids can form cyclic anhydride-like products only in special cases. The amino acid that readily gives a simple cyclic product on heating is glycine, which forms a cyclic dipeptide-related product represented in such questions as the six-membered ring derived from glycine units.

Hence,

3. Determine the dipeptide $X$

Since complete hydrolysis of dipeptide $X$ gives $y$ and $z$, and we found:

therefore $X$ must be the dipeptide made from alanine and glycine.

Among the options, this is:

4. Check options

• A: alanine-alanine $\to$ hydrolysis gives only alanine, not glycine. Incorrect.
• B: valine-glycine $\to$ valine with $\mathrm{HNO_2}$ would give $\alpha$-hydroxy acid of valine, not lactic acid. Incorrect.
• C: valine-leucine $\to$ no alanine/glycine. Incorrect.
• D: alanine-glycine $\to$ matches both observations. Correct.

5. Comparison with stored answer

Stored correct answer: D

Derived answer: D

They agree.