I don't believe that hole is normal or a "good" thing for that matter.

Planto

Got me. First time I saw something like this. Hope some one clears this up for us.

I, also want to know what this is ... looks like bugs or something ... can you take the white things out? I had earwigs chew a hole through a cactus, and it looked similar to this.

And just for future prefrance, polaskia dont like too much water, and hate cold.

The white is part of the cactus, when I took it out of the plastic pot down by the roots it was blackish gray and squishy so I cut it to try and save it and this is what I seen, I thought it might be that it was getting to much water, because about ever time I go to homedepot there cactus are never dry and there sitting indoors out of the sun so they dont have very good chances of drying out. Just a thought

From your description, I believe that hole is from rot, I'm not sure that it's salvageable. Sorry to be the bearer of bad news.

Planto

It looks like some larvai muching away . I would figure out a way of killing them. Either chemical or otganic. Pick your poison.

Thanks everyone for helping me out, I appreciate it.

I would definitely quarantine it away from your other plants.