Answer:
The correct answer to the question: What functions do mamillary bodies serve in the brain, would be: they are part of the limbic system and are relying center of information between the different parts especially of the diencephalon. According to studies done, they seem to be central to memory, memory creation and memory retention.
Placed at the very bottom of the brain, on its undersurface, as the end part of the diencephalon, and located exactly at the end of the anterior arches of the fornix, it has been seen that these two clusters of nuclei, the medial and lateral mamillary nuclei, connect with the other organs inside the diencephalon, through the mamillo-thalamic tract, and they relay information from the amigala and the hippocampi, to the thalamus.
Research shows that these two mamillary bodies are directly related to recollection of memories and damage to them can cause different types of amnesia.