The Potato Gremlins are the main antagonists in the Phineas and Ferb episode, Lotsa Latkes. They are mutated potato clones that were created by Phineas, Ferb, and accidentally by Buford.
When Danville was under a severe shortage of potatoes, and Isabella was unable to create her Nana's Latkes, Phineas decided to use the last potato chip the Buford had to create a large amount of cloned potatoes. After Phineas and Ferb created a machine, known as Spuds-a-lot, they placed the potato chip in the machine, and created a large amount of potatoes. However, as soon as they were completed, Isabella noticed that the potatoes had eyes. Baljeet replied that all potatoes have eye, but Isabella said that the eyes are blinking. The Potatoes jumped out of ground, with arms, legs and mouth. It turned out that Buford placed the potato chip in his mouth, with caused Buford's DNA to mix with the potatoes, resulting in the creation of the Potato Gremlins.
The Potato Gremlins scattered all throughout Danville, bullying everyone they encounter, while causing anarchy and destruction. Phineas, Ferb and Isabella traveled all across Danville, trying to capture as many Potato Gremlins as they could. Eventually, the Potato Gremlins came across the Mongol Army. After a bit of a stand-still, the Mongol Army attacked the Potato Gremlins.
In fear, the Gremlins retreated all the way to the Retirement Home. Just as the two armies were about to fight in the Retirement House, Perry the Platypus pushed a button on Heinz Doofenshmirtz's Historical Army Retrieve-inator, which resulted in the two, along with Doofenshmirtz, to be sent back into the past. It's unknown what happened to the Potato Gremlins, but it is likely that the Mongol Army killed and ate them.