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Ditto would appear to be made up of a gel type substance mostly made up of undifferentiated cells, or stem cells, hence it's ability to transform and change it's entire body structure so freely. It probably has a rudimentary digestive system as it does have a mouth. The eyes may actually be nothing more than eye spots, cells that can differentiate light and the absence of such, but little more. While it lacks reproductive organs it can probably alter it's chromosomes with some genetic material of the Pokemon it is breeding and use the sperm or egg cells of said Pokemon to create an embryo which can then be nurtured to grow into a fetus and then the egg contained the baby Pokemon. The baby will almost be a clone of the genetic donor, however differences will be present as the Ditto will imprint, even if in the slightest on the offspring.