They are evil Henchman who work for Dave and assist him in his plans to get rid of all penguins. They can't speak, but make a bubbling sound that Dave can understand. Each one share the first names of famous celebrities. When Dave ordered them to do something, said action would spell out the actors' full names. Ex. "Nicholas, cage them." "Halle, bury them." "Elijah, would you please take them away?" They're shown to be easily distracted, such as when Skipper, Kowalski, and Rico led them away from their posts with slap dancing.
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A running gag in the movie has Dave order the octopi to enact an action which would spell out the actor's full name; Ex. "Nicholas, cage them." (Nicolas Cage), "Halle, bury them." (Halle Berry), "Elijah, would you please take them away." (Elijah Wood), "Kevin, bake on!" (Kevin Bacon).