Those were Peggy's sister's kids. Did you notice the look her sister got when her mom was braggin about Peggy? I think the older sister resents Peggy and she was probably the apple of Mom's eye their whole lives. And now, even with a baby out of wed lock and perhaps a couple months in the looney bin, mom is still bragging about peggy even though sis has to take care of her bastard child so that Peggy isn't tarnished.
ETA: Here is the link to the sister's IMBD page http://us.imdb.com/name/nm0913585/












