To monitor Device1 by using Azure Monitor, you should associate DCR1 with Device1. A data collection rule (DCR) defines the data collection process in Azure Monitor, such as what data to collect, how to transform it, and where to send it. A DCR can be associated with multiple virtual machines and specify different data sources, such as Azure Monitor Agent, custom logs, or Azure Event Hubs1. To associate a DCR with a virtual machine, you need to install the Azure Monitor Agent on the machine and then select the DCR from the list of available rules2. You can also use Azure Policy to automatically install the agent and associate a DCR with any virtual machines or virtual machine scale sets as they are created in your subscription3.
The other options are not correct for this scenario because:
Azure Network Watcher is a service that provides network performance monitoring and diagnostics for Azure resources. It is not related to data collection rules or Azure Monitor4.
A Log Analytics workspace is a destination where you can send the data collected by a data collection rule. It is not an entity that you can associate a DCR with5.
A Monitored Object is not a valid term in the context of Azure Monitor or data collection rules.