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Could someone explain to me why the dygmies are good I cannot seem to play them right.

dygmies are caster dependant. most of the time they are an annoyance your OP needs to keep in mid, but with grim, eMadrak and a few others they explode.

A friend of mine plays Dygmies very well with Calandra. The Fellcaller's +2MAT ability is also very good on them, because it effects their point blank attacks with their slug guns. Basically, anything that helps them hit makes them painful, because 4/6 for a unit of POW14 weapons is nasty, let alone all the horrible tricks burrowing lets them pull.

a nigh-unavoidable charge from 10 pygmies hitting at pow14 +3dice each is nothing to scoff at

now all you have to do is boost them somehow(fellacallers,emadrak,calandra ) or debuff/KD their target

The dygmy formula is:
max Dygmies (6)
+
Fell Caller (3)
+
warlock
+
(optional) Champ Hero

This means Dygmies are typically a 9 pt investment, but you were likely to bring the FC anyways. To make them super safe, you also bring the champ hero to compensate for their terrible CMD.

The three big dygmy warlocks are:
eMadrak - gives godlike damage boost to a unit with multiple attacks and a P&S14 attack.
Grim Angus - his feat makes Dygmies nearly auto-hit, and even more unavoidable as enemy units can't reposition easily to avoid them. Hunter's Mark can help circumvent some LOS issues.
Calandra - her feat is like legal dice manipulation. Her KD spell aids in assassination runs, and Star Crossed puts Dygmy defense into nearly unhittable levels by unbuffed units.

They provide amazing angles and threaten the big guys
with their POW 14 melee attacks. Even if some are knocked down,
Burrow negates those penalties, and they will get to function just fine shooting stuff in the back on the following turn.

And if you have the Fell Caller close enough to assist them the
following turn, AND warlock buffs, then enemy heavies are likely to be scrapped.

There's a fantastic article in the troll forums called The Burrownomicon.

I've faced them with eMadrak and it changed how I played drastically. That alone can make them worth their weight in gold.

They are a tricky unit but once you get them down, its hard not to bring them with the casters that can exploit their awesomeness.

BTW: F that unit lol

The Burrownomicon

http://www.trollbloodscrum.com/2010/07/burrownomicon.html

Suggested lists based off of it:

http://www.trollbloodscrum.com/2010/07/burrownomicon-top-lists.html

A nice diagram of how to use them:

http://www.trollbloodscrum.com/2010/06/burrowers-useage-diagram.html

And the thread with the same information and a bunch of comments:

http://privateerpressforums.com/showthread.php?28305-The-Burrownomicon