Dollotrons were the final result of Lazlo Valentin aka Professor Pyg "perfecting" a person into basically a doll faced robot who was unable to think or feel anything. Pyg, after he suffered a mental breakdown, came to believe that people must have everything unique about them surgically removed if they were to become "better" and "perfect".
As the ringleader of the Circus of Strange, Pyg lured guests of all ages and both sexes into his shows where he surgically performed on them to change them into his Dollotrons. Those that he could not "fix" were killed and tossed aside like trash.
Before Arkham Knight Incident
Lazlo Valentin AKA Professor Pyg spent an unknown amount of years luring unsuspecting people into his Circus of Strange, so he could capture them and turn them into his Dollotrons. His mentally instability caused him to break deals he made when he took hostages, such as when he turned a hostage into a Dollotron prior to the ransom being delivered, and proceeded to do the same to the man who delivered it. Pyg had an operating theater hidden underneath his Pretty Dolls Parlor.
As Batman points out, these victims are suffering a fate worse than death itself.
Arkham Knight Incident
During the Arkham Knight Incident, Batman found six mutilated bodies strung up around Gotham, and all the while, opera music played on loop through speakers placed around the bodies. Because the process of turning them into Dollotrons corrupted their DNA and destroyed their fingerprints, Batman had to use his Deep Tissue Scanner to look for unique traits that made them stand out in the Missing Persons Database. All the victims had similar traits: troubled pasts, went through surgery prior to being kidnapped, had scars on them from accidents, genetic deformities, and they all went missing at fairgrounds and parks around the country; all of which were where the Circus of Strange had stopped on its route. Alfred found only one associated name involved with the circus: Lazlo Valentin, who leased a beauty salon in Gotham, the Pretty Dolls Parlor, but the lease expired before construction began on Wayne International Plaza.
Professor Pyg was interrupted during one of his experiments by Batman, who demanded that he release all of his prisoners from his Monster Machine. Pyg refused and turned his Dollotrons upon Batman before he joined in the fight, and throwing knives at him. After Batman defeated the Dollotrons, he arrested Pyg and took him to the GCPD Lockup. The GCPD brought the victims in themselves.
- What exactly Pyg did to the Dollotrons to corrupt their DNA was unknown. In the middle of his experiment, it's seen that he wrapped both their heads and hands in gauze before a doll mask to their face, as their masks were not removed at the GCPD Lockup. He's also making random slices into their flesh, but it was unknown what that procedure was supposed to do exactly. The only known procedure was the removal of sexual organs like breasts and male genitalia as seen when the bodies were scanned with the deep tissue scanner and observed scars on the body of the Dollotron that Batman fought after he initially confronted Pyg, which effectively mutilated them.
- While at the GCPD Lockup, the Dollotrons were violently twitching and their condition read: "Terrified".
- It was not explained what happened to the Dollotrons after the events of Arkham Knight, but due to their irreparable condition, it was possible they were killed out of mercy. This can be further expanded as with a recent update, the Dollotrons aren't in their cell after the attack on GCPD. Another possibility is they were institutionalized.