Final answer:
Dudley describes the little people as elves.
Step-by-step explanation:
In "The Time Machine," Dudley describes the little people as elves.
There is a passage in the book where Dudley describes the little people as having 'elfin faces' and being 'squat, ugly, and misshapen creatures. This description aligns with the traditional image of elves that is often depicted in literature and folklore.