Dieter is a character from
Saturday Night Live played by
Mike Myers that appeared on the fake
German TV show Sprockets.
He's known for asking "guests" if they wish to "touch his monkey".
Various things make him feel "like a little girl" (and so he pulls on the fabric of his black turtleneck to form little breasts to emphasize his little-girliness).
And he's known for announcing "Now is the time on Sprockets when we dance!" followed shortly by very trendy-ish (attempting to be trendy but not quite making it) music and robotic dancing moves executed while wearing a very serious pouting expression.