Penguin Tetra?

I have never heard of penguin tetras but I do know they need at least 5 to be safe.

+1. Ideally, you want 6, and in a 20 gallon tank. 3 is an incomplete school, incomplete schools = stress, and stress = lowered immune systems, and, sometimes, heightened aggression. Non-stressed tetras will not school tightly, but will spread out and swim alone, although still keeping other members of the group in sight.

Tetras aren't the easiest species to breed. They are susceptible to the usual diseases, the most common being ich.

I heard they need to be 30 gallons minimum, if I were you, I would get another 10 or maybe a 5 or 6.6 and get 3-4 more.

Those tetras are going to outgrow your tank. One can reach 3 inches by itself and a school of these are going to be to much for a 10 gallon tank. I personally would take them back and exchange for the ember tetra or look into the smaller corydoras.

http://www.tropicalfishkeeping.com/profiles/penguin-tetra/
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Tropical Fish Keeping Care Sheet

Thanks, guys! They are not bunched together or anything and I realized 2 of them have a cottony thing on the mouthes. it does not seem contagious. Is this normal?

I will try to get more...will I have to get them a separate tank, because I REALLY do not have extra space in the house.

Are they picky eaters or something? I fed them yesterday and about an hour later they spit all of it out! My betta ate it and got bloated(but he's okay.)

Seperate the sick fish immediately and change their water.. even if it doesn't seem contagious, it probably is.

You are indeed going to need a bigger tank for them, as ten gallons is simply not enough for a school of adult penguins.
I strongly second Olympia - isolate the sick ones and identify the disease. If you can, post pictures in the disease section asking for help.

I did a water change and put in Pimafix for a week (said it treated fungal infections). then I did another water change and it seems to be gone now. My betta never got it but the other penguins did, at least it is gone now. New problem...thought this may be due to the fungal infection. The penguins seem to be chasing each other around but leaves my betta alone. Do they have a pecking order just like female Bettas? What seems like the weakest one has shredded fins and some scale loss. Is this caused by stress, to small of a tank, or something else?

Stress from being in a small group and small tank. They do have a pecking order, like female betta. That is why you need at least 5-6 tetra. They will need a larger tank when they grow up, and a larger school. Otherwise your little guy is going to get bullied to death.

+1 to Olympia. I also strongly advise against using Pimafix in a tank with a betta. Firstly, it is not really useful, being almost entirely eucalypt oil rather than medication, and secondly, it can fatally irritate a betta's labyrinth organ.