I discovered this fungi in the garden today when I threw away some water from a bucket and a large puff of "smoke" (spores) rose up, not sure I would have seen it otherwise. The middle completely deflated as I poured water on it for a second time and then, as I watched, it puffed up again - fascinating. Google tells me it's called Earthstar fungi - I can see why.
@mcsiegle yes, the puff of smoke was spores being released. Apparently they do this when rain drops fall on it. I just happened to throw water over it.