From Halopedia, the Halo wiki
The Dazreme are native to the planet Reme, a world covered almost entirely by ocean and littered with a network of sunken Forerunner cities. The Dazreme would come to live in these cities and also repurpose Forerunner technology to incredible effect.
Discovery by the Covenant
Eventually, Reme would be discovered by Covenant relic hunters aboard the Burgeoning Fealty. Home to one of the largest discoveries of Forerunner treasures by the empire, the bulk of the reliquary was restricted to sunken underwater cities occupied by the Dazreme, who had used the Forerunner technology to create a thriving civilization. The San'Shyuum managed to broker an alliance with the species, leveraging their unique knowledge of Forerunner technology to ends not fully understood, though the Covenant were unable to penetrate their history or medical science.
As more species were formally integrated into the Covenant over time, the San'Shyuum went to great lengths to keep the existence of the Dazreme and their world a secret, including the practice of executing entire crews that had accompanied a Prophet on a diplomatic trip to the planet. Only a handful knew the coordinates to the planet, and those who simply knew of the world's existence only spoke about it in hushed tones far away from the prying eyes of the Sangheili. Following the collapse of the Covenant and the scattering of the San'Shyuum, the status of the Dazreme is unclear.
Anatomy and physiology
The Dazreme are an aquatic species, covered in fine layers of placoid scales. They come in a wide range of colorations, and are strong, resourceful and highly intelligent creatures. Their hands have two digits and a thumb, with webbing running up their arms. Their heads are similar in structure to the tail of Earth's sharks, with gills on the sides of their neck. Their mouths are similar in shape to some filter feeders, split into mandibles and lined with sharp teeth.