Kapali plays Myali ( a musical instrument like Flute) which has the immense power to call God in the stone idol.
They were given lands and home near the three Durbar Squares of Kathmandu valley in request by Malla Kings to stay near the palace.
In every festival of Newar Culture, a person from Kapali caste is called to play Myali in order to perform pooja to activate the deity of the idol.
Here, Shiva as BirBhadra cuts off the arrogant head to Daksha Prajapati [son of Lord Brahma] .
Khatvanga basically is like stick of skeleton of arm, having mystical power developed by tantra sadhana done by Kapalis in the crematory ground.