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Hansel and Gretel appear as major antagonists in the direct-to-DVD sequel of "Terror Toons" known as "Terror Toons 2" and like the original is often cited as one of the worst modern movies of all time, however it is worth noting that just like the original it was never meant to be taken seriously and is very much an over-the-top comedy horror in the style of Troma films (having low budget effects and "camp" humor).
However, despite the comedy elements, Hansel and Gretel were vicious and ultra-violent destroyers who were intent on a never-ending murderous rampage on behalf of Damien and the forces of Hell, which were using them as a way to drag people into Hell and thus dominate the universe.
Originally normal children inhabiting a parallel world not unlike a cartoon, both Hansel and Gretel were mutated by a witch into horrific cartoon demons: a demonic anthropomorphic rat, and a criminally insane girl with big teeth. They proceeded to rip the witch in half and go on a bloodthirsty rampage while at the same time a DVD arrived at the doorstep of a young girl's home in the "real" world which transported her and her friends into the nightmarish world once played.
Hansel and Gretel pursued the unfortunate group across the nightmarish realm and killed many people in the process, eventually they engaged in a gruesome battle on the gates of Hell itself were they attempted to launch the main protagonist into Hell with a rocket only to be defeated by one of her friends.
Hansel and Gretel were not finished, however, and merged with a horrific worm demon to try and finish the heroes off for good but were seemingly killed when the rocket was used against them in a violent explosion.
Although Hansel and Gretel most likely died Damien did not and at the end of the movie he is shown at a video store handing in a collection of "Terror Toons" DVDs and laughing maniacally.