I wish more people could photograph their grass like that. That close-up is EXCELLENT!
With the word fungus in the mix and looking at the picture my first thought was powdery mildew, but I believe northwesterner is right. That looks more like an insect. Just because the insect is one one variety of grass, I would not assume it will jump to the St Augustine.
The St Augustine will come out of dormancy by late March or early April unless you live in South Texas or Florida. In those places it is already coming out of dormancy. Just be patient.
When you see it first starting to green up, if you have not had any rain in the previous few weeks, then you could water it a full inch. You'll have to measure an inch of water using cat food or tuna cans placed around your yard. My watering system is extremely slow and takes 8 hours to deliver an inch, so you'll have to check yours for yourself. Don't get excited about watering again for about 3 weeks after that first watering. If you get an inch of rain before then, then set your watering calendar for 3 weeks after the rain stops.
It sounds like you might be doing several things wrong in your lawn. Here is the 1-2-3 of basic lawn care.
- Water deeply and infrequently. Deeply means at least an hour in every zone, all at once. Infrequently means monthly during the cool months and no more than weekly during the hottest part of summer. If your grass looks dry before the month/week is up, water longer next time. Deep watering grows deep, drought resistant roots. Infrequent watering allows the top layer of soil to dry completely which kills off many shallow rooted weeds and prevent new (weed) seeds from germinating.
- Mulch mow at the highest setting on your mower. Most grasses are the most dense when mowed tall. Bermuda, centipede, and bent grasses are the most dense when mowed at the lowest setting on your mower. Dense grass shades out weeds and uses less water when tall. Dense grass feeds the deep roots you're developing in 1 above.
- Fertilize regularly. I fertilize 4 times per year using organic fertilizer. Which fertilizer you use is much less important than numbers 1 and 2 above.