Concept:
There is an important difference between active and passive immunization. An antitoxin is a preformed antibody given to a patient (passive immunity) to provide immediate protection against a toxin.
Step 1: In tetanus, the bacterium Clostridium tetani releases a powerful toxin (tetanospasmin) that causes the muscle spasms. Tetanus antitoxin is a ready-made antibody against this toxin. When injected, it binds to and neutralizes the toxin that is still circulating freely (unbound) in the blood, stopping it from reaching nerve tissue.
Step 2: Notice what it does NOT do — it does not kill the bacteria or stop them multiplying (that is the job of antibiotics), and it does not make the body produce its own antibodies (that would be active immunization with the tetanus toxoid vaccine).
Answer: Option (2) — Tetanus antitoxin works by neutralizing unbound toxin in the blood. (2)