The cutting of DNA at specific locations is done with help of:

The correct answer is Option (2) → Restriction Endonuclease

Option (2) Restriction Endonuclease — Correct. Restriction endonucleases are the ‘molecular scissors’ of genetic engineering. Each one recognises a specific base sequence (its recognition site) in DNA and cuts the DNA at that point. This is what makes it possible to cut DNA at specific locations; Hind II was the first one to be isolated.

NCERT Extract:
Principles of Biotechnology – “… The cutting of DNA at specific locations became possible with the discovery of the so-called ‘molecular scissors’– restriction enzymes.”
Restriction Enzymes – “In the year 1963, the two enzymes responsible for restricting the growth of bacteriophage in Escherichia coli were isolated. One of these added methyl groups to DNA, while the other cut DNA. The later was called restriction endonuclease.”