Here's why:
* Fray (verb): To wear away by rubbing or friction, to unravel, to become worn or tattered. *Example: The rope began to fray at the edges.*
* Fray (noun): A noisy fight or brawl. *Example: The two teams got into a big fray after the game.*
Since the word "fray" has two distinct meanings and spellings, but sounds the same, it qualifies as a homograph.