Dwarfs were sometimes considered to be useful nature-spirits whose help could be sought by those in need, mainly in folklore as opposed to being formally recognised in religious praxis. They were considered to be skilful smiths and wise counsellors but they had a sinister side to their nature due to living underground, beneath large stones or under mountains, thereby associating them with the dead. Dealings with these beings was characterised by reciprocity which is a common theme throughout Heathen general praxis. If seeking counsel or some other useful contact with a dwarf or suspected dwarf, it would be customary to meet gift with gift. Old English evidence is far from plentiful but all sources agree in showing them to be malevolent beings and a source of illness. The Lacnunga manuscript actually instructs a man on how to deal with a dweorh that has inflicted a malady upon someone by recommending a plant to cure the illness. (See Wið Dweorh Charm)
Dwarfs were also believed to be able to lead miners to rich seams of ore but if the gift in exchange was deemed insufficient, then they were said to lead men to their deaths below ground or to spoil the ore. They were often associated with standing stones and offerings would be left at these locations to appease them.
There is a persistent association with the dead that pervades the lore around dwarfs, identifying them even with the disembodied souls living within burial mounds and those who may have suffered a premature or sudden death, thereby associating them as liminal beings. The goodwill of a dwarf must be earned with significant tokens of appreciation but a persistent association with such would be dangerous and ill-advised due to their somewhat chaotic and sometimes insidious nature.