Red Caps are dark magical creatures that live wherever there has been bloodshed, such as in the dungeons of castles and in the potholes of battlefields. They will bludgeon to death those who get lost. Although they can be repelled with simple spells, they are dangerous to Muggles. They are small and goblin-like, mostly found in northern Europe.
Harry Potter and the rest of his Defence Against the Dark Arts class were taught about Red Caps in their third year at Hogwarts by Remus Lupin. When Severus Snape substituted for Remus Lupin he was scathing that they had been taught about Red Caps, claiming that first years should be able to manage them. During their practical Defence Against the Dark Arts exam they had to get past an obstacle course of dark creatures, including crossing a series of of potholes containing Red Caps.