Donald Duck is turned into this form when he visits Atlantica. While in this form, he is half-duck on the upper part and half-fish from the waist down.

Kingdom Hearts

In the first game, Donald is able to use magic he's learned from other worlds and fight with his wand.

Kingdom Hearts II

In the second game, Donald's ability to use magic is removed as the design of Atlantica is converted to a world whose story progresses via songs.

Exception

Although Donald turns into a merman when he visits Atlantica in most of the games, there has been one exception in Chain of Memories where he retains his true form.

Trivia

Because he was a magician, it's made clear that Donald's squid form is referenced from the sea witch, Ursula, who is an octopus.