Although they were corporeal, they used technology to exist in a collective dream state. They broadcast this collective dream into the surrounding space and used it to trap starship crews in a shared dream. The crews then eventually perished as their bodies lacked consumption of food and water. This seemed to be a defensive measure although it may have been a method of attack. It is also unknown if this species operated real starships, because any seen in the dream state may have been illusory.
The race was encountered in 2374 by the USS Voyager, trapping the crew in their nightmares, but was defeated by Commander Chakotay, who had unusual command of his dream using a technique called lucid dreaming, allowing him to plant a 'trigger' in his mind where his subconscious would include Earth's moon in his dream, allowing him to realise that he was dreaming and wake himself up. With this method- and the aid of The Doctor, who, as a hologram, never slept anyway-, Chakotay was able to stay awake long enough to locate the sleeping aliens in a cavern on a planet. With the Doctor ordered to launch a photon torpedo at the cavern if Chakotay didn't respond, Chakotay was able to fall asleep and confront the aliens, forcing them to dismantle the transmitter that the aliens used for their dream attacks and end the crew's nightmares before the Doctor destroyed them. (VOY: "Waking Moments")