Which two things should the Development Team do during the first Sprint?

According to the Scrum Guide1, each Sprint is a project with no more than a one-month horizon. The Sprint Goal gives guidance to why the Scrum Team is building an Increment. The Development Team consists of professionals who do the work of delivering a potentially releasable Increment of “Done” product at the end of each Sprint. Therefore, in the first Sprint, as in any other Sprint, the Development Team should develop at least one piece of functionality and create an increment of potentially releasable software. The other options are not consistent with Scrum values and principles.

References: Scrum Guide