Heat a frying pan with butter and olive oil over medium heat. Add onions, thyme, 1 teaspoon salt and 1/2 teaspoon black pepper. Fry 15-20 minutes until caramelised. Transfer to a bowl to cool.
In a mixing bowl, combine mayonnaise, cream cheese, sour cream, garlic powder, Worcestershire sauce, 1 teaspoon salt and 1/2 teaspoon black pepper. Mix in the cooled caramelised onions.
To make the body of the octopus, take a knife and cut the first capsicum in half, removing the stem, white ribs and seeds. To make the tentacles, cut the second capsicum into strips, starting with the stem end to get the curled look.
Spoon some dip into a serving bowl. Set the octopus body in the middle, submerging it a little. Place tentacles on either side of the body.
For eyes, cut two slices of black olive. Take bit of dip and dab it in the middle of the olive slice for the pupil. Use more dip to adhere the eyes to the body. Serve!