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I intend to answer the question that The Hobbit films left unanswered: what do half elf/dwarf babies look like? The answer? Hot humans.

In Tolkien’s stuff you can mix human and elf, but no mention is ever made of dwarves mixing with other races. I don’t know if a reason is ever given, but my guess is that they can’t mix because Dwarves weren’t created by Iluvatar, the god of that universe. They were created by Aule “the craftsman”. He made them in his image but wasn’t capable of giving them life as that was a power reserved for Iluvatar. When he was discovered he explained that since he was created in the image of Iluvatar he had the urge to create life, but couldn’t. To make amends he raised his hammer to smash the dwarves himself, but they cowered in fear because in that moment Iluvatar took pity on Aule and breathed life into the dwarves. Iluvatar then put the Dwarves to sleep. They would not awaken until after the Elves, firstborn of Iluvatar woke unto middle Earth. They are considered the adopted children of Iluvartar. Since they were created in Aule’s image they are able to resist the domination of evil, even though they are prone to evil like any other race. They resist domination much more than men, which is why they couldn’t become wraiths. At best their innate desire for precious metals and gems was what had to be manipulated in order to use them for evil aims, but even then their strong sense of honor could be appealed to and break the gold sickness. This is why Thorin comes to his senses after falling prey to it in the Hobbit.

In my little world Elves, Dwarves, and men are functionally different lines of a single race that have forgotten whatever common ancestor they shared. Capable of interbreeding with each other and several other humanoid races. It’s a real fuckfest buffet in this fantasy world.