The correct option is Option #1: Use the equation \( x^2 - a^2 \), where \( a \) is the middle number (midpoint) and \( x \) is the distance from the midpoint to either endpoint.
This is because if you have two numbers that are equidistant from a midpoint \( a \), you can express them as \( a + d \) and \( a - d \), where \( d \) is the distance. The difference of squares identity states that:
\[ (a + d)(a - d) = a^2 - d^2 \]
Thus, Option #1 correctly describes how to apply the difference of squares identity in this scenario.