When Rosencrantz and Guildenstern finally find the Prince and ask him for Polonius, he bewilders them with answers that seem to be riddles. He tells them that sharing information with mere sponges and parasites of the court is beneath him, the son of a king.
Hamlet finally reveals his full disdain for Rosencrantz and Guildenstern, saying that he has neither love nor respect for them or their King, to whom he refers as a "thing." Hamlet calls his classmates the worst kind of parasites. The King, Hamlet suggests, keeps Rosencrantz and Guildenstern around "as an ape doth nuts, and in the corner of his jaw; first mout'd to be last swallowed." As long as Claudius needs what the pair can glean of Hamlet's intentions, he will continue to use them; however, Claudius is squeezing them as he would any sponge and will eventually leave them dry again.
Shakespeare uses this as an opportunity to demonstrate Rosencrantz's and Guildenstern's shallow wit. "I understand you not, my lord." Hamlet answers with an outright insult to their collective intelligence by commenting, "a knavish speech sleeps in a foolish ear." Their inferior intelligence fails to discern his ironic, sarcastic language.
compounded restored, mingled.
first mout'd put into the mouth first in order that all the goodness may be extracted before swallowing.