The Britons had been working at a hospital on the Malaysian island. Officers said they had been involved in a row with the suspects before the attack.
Deputy police commissioner Chai Khin Chung said they had completed their investigation and they would pass on their evidence for prosecution.
He said: "We have finished our investigation, the crime has been solved.
"The suspects have been apprehended and they have admitted the crime. We have recovered the weapons from the crime.
"We are waiting for the corpses in the hospital mortuary to have the post-mortem carried out.
"We have all the major evidence in our hands which we will send to the prosecution."
Police said Mr Dalton, from Belper in Derbyshire, and Mr Brunger, from Gillingham in Kent, had been involved in a row at a bar early on Wednesday.
The suspects had allegedly claimed the Britons were being too loud and as they walked home they were chased by a car, according to reports.
One of the men reportedly got out and attacked the pair. They were found lying in the road several metres apart at 4am in the morning with serious injuries.
The Britons were travelling with a friend, Niall Durkin, 23. It is not known if he was also caught up in the attack.
Malaysia's The Star newspaper alleged that the main suspect is a 23-year-old fishmonger.
They claimed the others arrested are a 29-year-old mechanic, and a 19-year-old and a 35-year-old who are both unemployed.
Two are said to have previous convictions for drugs and armed robbery.
Sawatar Hospital medical director Dr Chin Zin Hing said the deaths of the two men was "very sad".
He said: "We are trying to provide counselling for the students here. We currently have about 20 British elective students."
He said the hospital is also working closely with the British Embassy to "see how best we can provide some assistance to the families of the men".
The Dean of Undergraduate Studies said: "We are all so shocked and saddened by this.
"They were excellent students, they were doing really well with their studies, they were highly committed and coming back next year to work as doctors.
"Aidan was aspiring to do some medical research on his return, Neil was going straight into his final year and it's such a tragic thing to occur."
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