CORRECT TEXT
You boot a freshly installed system loaded with all the defaults, xdm loads and crashes, and the system halts.
How can you force the system to multi-user text mode with networking from the LILO: or boot: prompt?

Answer: linux 3

Explanation:
There is a configuration file named /etc/inittab contains default runlevel, run level specific scripts etc. If you want to boot the system other than default runlevel you
can pass the kernel argument from boot loader. When you get the lilo screen, press ctrl+x and type linux runlevel.
The available runlevel are:
0 – halt (Do NOT set initdefault to this)
1 – Single user mode
2 – Multiuser, without NFS (The same as 3, if you do not have networking)
3 – Full multiuser mode
4 – unused
5 – X11
6 – reboot (Do NOT set initdefault to this)
Runlevel 3 is called multi user so you should boot your system on run level 3 using linux3