Runic Magic

In the ancient days of the First and Second Ages, the Dwarves of the Deep had no access to the Arcane Flow of the Surface, nor access to the potent energies of the Chaos in the Underworld. Instead, the Dwarves devised a completely different source of magical power from the Living Stone.
By inscribing powerful runes on the Stone, they were able to draw out its latent inner magical power to utilize in everything from city construction to lights and heat. These Rune Scribes and Rune Priests were and are considered to be Masters of magical manipulation, though it is unclear whether their teachings still survive till this day.
Before the first appearance of dwarven females, Runic Magic is what the dwarves used for the purpose of reproduction.  This method was lost to the dwarves who came to the surface in the Third Age, when they abandoned their stockpiles of Living Stone in the Deep.
It should be noted that Runic Magic differs greatly from a Hermetic Magical Rune. The Hermetic use of runes and sigils are meant to be used as conduits that direct the Flow, where as Dwarven Runes draw Arcane Power out from the object and become generators of their own internal source of magic to be used in a multitude of ways.