The butterfish, or peprilus triacanthus, is a schooling fish with an oval body that roughly resembles a flounder.This small fish inhabits the waters along the Atlantic coast of North America between Florida and Newfoundland.lso known as escobar, sheepshead, and dollarfish, the butterfish is used as both food for human consumption and as bait for larger fish. It has been commercially fished in the United States since the 19th century. The fish was first used as a fertilizer until people discovered it was good enough to eat.