After removing drywall, studs, & insulation in preparation for a basement waterproofing service, I discovered some mold on the red brick foundation. There also is a coating of some kind that is very brittle & crumbly, and it looked like mold was growing behind some of the bubbled out sections. I don't know what the existing coating is, but I plan on putting a new one on using Drylock. I am going to use bleach to clean the areas affected by mold. My question is how do I get the existing coating off, or can I just put the Drylock over it? I'm afraid if I scrape it off I will break bricks and disturb mold already growing.

It may not be mold, but rather effervesence. It's usually associated with concrete. Sometimes it looks fluffy. You can't really break bricks.

But when you read the dryloc directions, it says to ETCH the brick with either dryloc's powder you mix with water or muratic acid ( dilute hydrochloric acid).

If you don't do the etch and remove the loose paint, the new paint has no chance at all to stick. The etch will remove the "mold". I don't think it's mold. Can you post a picture? Use the "Go advanced" button to do so.

It's a nasty process to do and you have to be careful, so it's advised to search for the MSDS of either muratic acid or dryloc's powdered itch. Gloves, safety glasses and ventilation are strongly advised. If you need the name, I'll go look at a bottle.