If you ask a naturalist what the red caps are, I can guarantee you will be told that "they're the fruiting bodies." I have never found out exactly what that means, but I know it's the right thing to say - so I pass it on. The red cap lichens are often found growing with other tiny, curious forms, including some all-green ones called pixie-cups. Perhaps they just like the same kinds of situation - dead wood to grow on, dappled sun - or maybe they relate to one another in some way (the red caps are the fruiting bodies of the others?).