Dwarves of Muspelheim

Beyond the eastern borders of Mordia lives a people who embrace a higher level of civilization despite their draconic neighbours: the Dwarves of Bizir in the realm of Muspelheim. They are steadfast and durable like the mountains they live under. They do not allow themselves to be bothered or moved by arbitrary ideas and events, standing where they always have, unlike the Humans that wage war or emigrate for even the slightest reason. The sons of soot and stone value that which is lasting, that which remains and is as it has always been, like the mountains. This is perhaps because the Dwarves have been here for so very long, some people even say longer than the Elves. 
It is said and sung that the Dwarves came from the sparks that were emitted when the shaper god-king Arcoth struck his mighty anvil with his hammer and created the world. When these sparks hit the ground, they took the shapes of worms that slithered about and hid beneath rock and stone. Arcoth noticed the sparks and was fascinated by their transformation. He started to shape the worms and bestow them with consciousness, the power to craft, and strong and sturdy souls. Ever since that moment when the worms became what we today call Dwarves. Those who rejected his gifts became dragons who now hide in the mountain peaks avoiding his wrath.
Today the Dwarves live in the underbelly of the world known to Mordians as Muspelheim. They keep to themselves and hammer away at their burning logi furnaces, forging things of such might and beauty that ordinary folk cannot fathom the craftsmanship. But the Dwarves, however stubborn, have no choice but to deal with the outside world, forced to interact with traders of Eastern Mordia or the parts of Bizir that exist beyond the mountains - lands uncharted by Mordians.