I remember seeing the video box for this at my local rental library back in the mid-80s and thinking 'what a fun looking horror comedy'. After all, its called "Ghoulies", which sounds slightly rude, its got a picture of a little goblin type character popping out of a toilet, so its bound to be like a much cruder version of Gremlins, packed full of toilet humour, right? WRONG!!!!!
What we actually have here is your standard low budget horror movie about teens and black magic. The plot for this revolves around one such teenager, Jonathan Graves (Peter Liapis), who inherits an old mansion that once belonged to his late father, who it seems was some sort of occultist. Finding a load of books on black magic in the basement, he decides to try out some of the incantations to see if they actually work (never a good idea in a horror film).
Consequently, he becomes possessed by evil spirits, causing him to start wearing dark glasses. Then he summons up a number of evil little goblin type characters (the titular Ghoulies of the film) and a couple of evil looking dwarves and, well, that's about it really. The Ghoulies (a bunch of crudely fashioned puppets) and the evil dwarves (midgets with novelty fangs) just seem to hang around the house whilst Jonathon gets dragged deeper and deeper into the world of black magic and nothing much else seems to happen. Occasionally one of his friends stops by and something unpleasant happens to them, but that's pretty much it.
Produced by Charles Band, the film was marketed as a comedy but was actually just a low budget film about black magic gone wrong and proved to be extremely dull and uninteresting. For the most part the Ghoulies and the Dwarf characters were superfluous to the plot and some scenes actually looked like they had been tacked on afterwards (the scene of the Ghoulie popping out of the toilet certainly was).
To summarise, the film was a complete bore-fest, which wasn't funny or entertaining and the toilet humour, hinted at on the video case artwork, was nowhere to be seen. A couple of the sequels were slightly better (there were 4 films in total), but I would strongly advise giving this one a miss.