[Overtaxed]

Here's a Tolkienish theology question. What happens to dwarves when they die?

Since Jen hasn't answered yet.....

From Encyclopedia of Arda:

Dwarvish Mortality

Though they live much longer than Men (usually around 250 years), Dwarves are mortal creatures. What happens after their death, though, is a mystery. The Elves have said that the Dwarves return to the stone from which they were made, but the Dwarves have a different belief.

According to Dwarvish tradition, they are gathered by Mahal (their name for Aulë) in a part of the Halls of Mandos set aside for them. After the end of the World and the Last Battle, they say, they will aid Aulë in the rebuilding of Arda.

[Bear_in_RoseBear]

From Encyclopedia of Arda:

And that explanation is repeated almost word-for-word from the chapter of the Silmarillion entitled "Of Aulë and Yavanna", so I guess we can take it as canon.