Correction

In this extract, we can see that Dudley is agitated. He is gloating over /bragging about/boasting about his deeds. When Harry asks him if he has beaten up another 10 year-old, we understand that Dudley has a habit of terrorising younger kids. When he appears to feel unsure at first, when he is goaded/encouraged/spurred by his friends, he starts making fun of Harry / laughing at Harry. His friends are also laughing which makes him feel secure in the knowledge that he is doing something funny. 

The group is threatening. They are more numerous, they are tall and big compared to someone who is frail, younger or could appear weaker.