“The plural of dwarf is dwarves. Just as the plural of calf is calves.”
I think it can be either.
http://www.m-w.com/dictionary/dwarf
It's interesting that "dwarf" has both noun forms listed as acceptable, the verb "to dwarf" has a third-person singular conjugation of "dwarfs" (not dwarves). The verb form of "calf", however, is "calve", which means its conjugated form is "calves", the same as the plural noun.