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My 2 cents for what it's worth.
Eels are my primary bait when fishing form the surf at night (though I plan to try plugs more and have a couple "Afterhours" plugs to try this year).
I drop the eels in the sand before I attempt to hook him. This slows him down and makes him easier to grip. Definately get into the water ASAP after hooking to minimize the chances of a ball. I hook from the bottom and out through an eye socket as Mike P. suggests.
Last but not least, there is nothing like Mako Joe's custom eels bucket to keep the eels cool, not drown them, keep the slime out of the truck, and keep them alive several days in a row.
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