Final answer:
The correct direct object pronoun to use in the given sentence is 'lo'.
Step-by-step explanation:
The correct answer is Ellos lo hablan.
In this sentence, 'español' is the direct object because it receives the action of the verb 'hablan'. When rewriting the sentence using a direct object pronoun, you replace the direct object with a pronoun. In this case, the pronoun 'lo' is used because 'español' is a masculine singular noun. So the correct sentence would be 'Ellos lo hablan', which means 'They speak it'.
Learn more about Direct Object Pronouns in Spanish