Eugene Clud is a school inspector from the New York Department of Education. When he visited the Jean Grey School for Higher Learning, the adolescent Hellfire Club triggered a chemical in his body (which he had gotten from his home's tainted water supply). The chemicals, coupled with the hormones of his body (released in the midst of his terror over the attack on the school) started his transformation into a Sauron-like creature.
After transforming into his pteryl form, he fought Kid Gladiator until Quentin Quire mentally suggested his go fight Mrs. Marigold who had transformed into a Wendigo.
After the confrontation with the Hellfire Club, Beast managed to transform Mr. Clud back. Later, we see him in his human form and laughing at one of Beast's jokes...because they had lost all memories from the last 24 hours.