Is it plagiarism for my thesis advisor to publish a paper using content from my thesis without citation? I did my master thesis last year and recently I found out that a group of four faculty members in my department, including my thesis advisor, have published an ACM paper based on that. (A publish subscribe system based on SDN) 

I will be honest. The problem statement was put forward by the faculty. The implementation (design of algorithms and coding) was completely done by me in my thesis. Then they further extended it to a distributed SDN controller environment.

In the paper, an entire section is devoted to the algorithms and implementation. Where they have almost ripped off from my thesis. The sentence structures have been changed and some beautification done to the algorithms to make it look concise.

However, I have not been given any acknowledgement or citation. Anyone who'll read that paper will have an impression that the authors were the only brains behind the project.

The university holds the copyright of my thesis. So I am not sure if this qualifies for plagiarism. But certainly, I feel it is not fair to brush someone's contribution under the carpet.

What can I do about it ? Or am I mistaken and they have every right to do how they feel as I am no longer a student there and the copyright is with them ?
Whether or not the department holds the copyright to your thesis is irrelevant. Using someone else's ideas without appropriate attribution is plagiarism, period.

So, if your advisor used your original, non-trivial scientific ideas (or your non-trivial description of those ideas) in his paper without attributing them to you, then he has committed misconduct.

The only thing that may be questionable is whether or not your original intellectual ideas were actually used in the paper. What you describe definitely sounds pretty damning, and the more information you add, the worse it sounds; but as strangers on the Internet, we don't have the whole story.

For example: Given that the idea for the thesis was the advisor's, and the paper describes a non-trivial extension, it's possible (though perhaps not likely, depending on the scope of the work) that your advisor was working on the extended version himself independently of your thesis.

It's also possible that he considers your work to be a straightforward implementation of his idea, and not an intellectual contribution - that is, he believes you were doing the work of a staff programmer, not a scientist or engineer. In which case, an acknowledgement would probably have been appropriate, but it's not necessarily plagiarism to omit it.

The degree to which your work constitutes an intellectual contribution to your advisor's paper is impossible for strangers on the Internet to judge. 

I suggest you email your former thesis advisor, tell him you've seen the paper, and ask (in a non-confrontational way) how it relates to your thesis work. Then decide how to proceed from there.

Note that pursuing the matter beyond that (i.e. formally accusing him of plagiarism) may involve some serious negative consequences for you, so consider this carefully before proceeding. The morally just course of action may or may not actually be in your best interests.