It’s a variation of the Two Kinght defence, the usual move sequence is 1.e4 e4 2.Nf3 Nc6 3.Bc4 Nf6 4.Ng5 d5 5.exd5 Nd4 6.c3 b5
Why Bf1 in Fritz Variation?

I often play the Fritz as Black. Most master games continue Bf1, and I too have no idea why.I can only speculate that white wants to keep the bishop pair, any any other bishop move is even more awkward.
And yes, the fritz is sound, Bobby Fischer lost in less than 20 moves against Berger(Who?) with this. (Fischer DID play Bf1, didnt help him, though)

Here's the game:[edit it may be argued that fischer's blunder here was removing the bishop from f1 again?]

DT, regarding the last line, 7.dxc4 bxc4 8.dxe5 is interesting but not so easy to play. Black can probably get away with both Nxd5 and Qxd5. He has open lines, easy development and the two Bishops. If you want you can investigate those with a computer and you might find something, but there's really no need since Bf1 is known to be good for White.
So you answered yourself, Bf1 is the best option.

rooperi, in the Fischer game, the blunder was the move d3. Instead of d3, White could've played 13.Re1 with a better position.
1. e4 e5 2. Nf3 Nc6 3. Bc4 Nf6 4. Ng5 d5 5. exd5 Nd4 6. c3 b5 7. Bd3 Bf5 8.Bxf5 Nxf5 9. Qf3 Nh4 10. Qh3 Ng6 11. d4 Qxd5 and material is equal. This was the beginning of the game Morozevich-Timman in which Timman won.
Indeed, Bishop can be kept with 7.Bd3. Still, however, Black won if I did understand well.
Jontsef, I’m not sure hot to "investigate" those with a computer. I do have Sigma Chess, can’t use it very well, however
Still, I understand that 7.Bd3 or 7.dxc4 may not be bringing advantage to white and that Bf1 is "known" to be best, what I do not understand is exactly HOW it should help white’s play.

I'm not sure what Sigma Chess is but it might not be the best idea to use a computer anyway. Just look at the lines with a board and attempt to analyse them.
The way Bf1 "helps" White is by being the best possible option available to him and thus providing the best chances to win... You may call it the lesser evil if you wish.
Isn't taking a pawn with check and spoiling the opponent's castling rights a reason good enough to play Bf1?
On b3 or any other square, the bishop will be swapped by a knight from d4. So, 7.Bf1! is best, when after 7...Nxd5 8.cd4 Qxg5 9.Bxb5+ Kd8 10.0-0! (most probably slightly more exact than 10.Qf3) when basically Black is much worse - not losing, but the position is very unappetizing. I have stopped playing the Ulvestad/ Fritz as Black several years ago because of this continuation.
Quite clear, indeed! Thank you very much and everybody for the answers.
Still a couple of doubts, however. Couldn’t I follow this same line with 7.Bd3? I assume there is a better counterplay for black in this situation, but I can’t see it.
The second doubt is that black could use 9...Bd7 to prevent to move the King. I suppose, however, that in this case white could be glad to lose the Bishop pair, since the same happen to black which has also the disandvantage of being unable to castle. Am I correct?
Hi everybody.
I know that in the Fritz Variation the best move after 6...b5 is considered to be Bf1. I’ve actually read that this move is the only good one in that situation.
However, I find it difficult to understand why is that. At first glance, white loses a pawn after 7...Nxd5, loses a tempo (two, actually, since the Bishop is moved 2 times for nothing), gets again in the King’s way preventing castling. I suppose there is some hidden benefits, but I honestly fail to see any.
Can it be that, as that is seen as the "only" good move, other possibilities are simply just worse? However Bf1 (correct me if I’m wrong) is not seen as bringing a disadvantage to White, is it?
Also, are other moves really that bad? Couldn’t the Bishop, for example, just land safely on d3? Or is it that bad even an exchange? 7.cxd4 dxc4 8.dxe5
What’s the problem with this last one?
Thanks in advance, kind regards.