 In the Hispanic folklore of Mexico and the American Southwest, duendes are known as gnome-like creatures who live inside the walls of homes, especially in the bedroom walls of young children.They attempt to clip the toenails of unkempt children, often leading to the mistaken removal of entire toes.Belief in duendes still exists among the Mixtecs and Zapotecs of Oaxaca and it is said that they are most commonly found in the mossy cloud forests of the state's mountain ranges.