Q: How Did Sauron Give the Seven Rings to the Dwarven Kings?
ANSWER: To the best of my knowledge, J.R.R. Tolkien never wrote an account of how Sauron could have bestowed seven Rings of Power upon Dwarf lords. It seems odd to think that Durin of Khazad-dûm, who had aided the Elves in their war against Sauron, would accept any gifts from Sauron. But if we’re going to venture down the path of wild speculation let’s back up and examine as many pertinent facts as possible.
To begin with, we know that the Dwarven kingdoms were scattered across northern Middle-earth. The Firebeards and Broadbeams originally settled in the Ered Luin between Lindon and Eriador. Most fans seem to feel that the Firebeards were the Dwarves of Nogrod and the Broadbeams were the Dwarves of Belegost. Azaghâl was the only king from either of those peoples whom Tolkien named. He was slain by Glaurung but either his descendants or another family apparently continued the royal tradition of Nogrod.
Nogrod’s army was destroyed in a war with the Elves of Doriath. The recorded history of the Dwarves of Nogrod and Belegost technically ends with the destruction of both cities in the tumults of the War of Wrath. Many of the Dwarves eventually migrate to Khazad-dûm early in the Second Age. But where did their two kingly houses settle? It seems unlikely to me that Durin’s Line would have welcomed rival kings in their main city.
I see two possibilities: first, that the royal families for both tribes could have remained in the Ered Luin. Tolkien notes that Dwarves continued to live in those mountains throughout the Second and the Third Ages. Second, the two kingly families could have settled in Gundabad. A relocation for both families to Gundabad is an interesting idea because of what happens later.
To the east of the Longbeard Dwarves (Durin’s Folk), whose dominions ended at the Iron Hills, lay the domains of the Ironfists and Stiffbeards. East of those two Dwarven realms lay the domains of the Blacklocks and Stonefoots. Although that is all we know about their tribes and their locations, we know that they sent delegations to Gundabad (when it was under Dwarven control) and that they would assist other Dwarven peoples in times of crisis. The only seven-kingdom alliance Tolkien documents is that from the War of the Dwarves and Orcs (Third Age years 2793-9).
Gundabad was not seized by Orcs until sometime in the Third Age (I would guess after the arising of Sauron, perhaps around the time that the Lord of the Nazgûl established the realm of Angmar). Hence, Dwarven delegations could have gathered at Gundabad throughout the First and Second Ages, even after the War of the Elves and Sauron. Although Sauron was defeated in that war he was not slain, and the essay “Of Dwarves and Men” (published in The Peoples of Middle-earth) says that Sauron destroyed the civilization of the Northmen that had risen up in the northern Vales of Anduin during the war.
So it seems to me that Sauron could have disguised himself as a servant of Aulë, or even as one of the Elven-smiths of Eregion, and visited a conclave of Dwarven kings at Gundabad. There he could have dealt with them in secret beyond the knowledge of the Eldar and bestowed the Seven upon them. If, as I have surmised in my essay “Shhh! It’s a Secret Ring!” that the Eldar never told the Dwarves why they fought a war with Sauron in the middle of the Second Age, the Dwarves would not have known to beware of a powerful “friend” offering them great artifacts.
Although one could speculate that Sauron might have doled out Rings of Power to the Dwarves during the final years of the Second Age, Durin’s Folk stood with Gil-galad and Elendil; they would not have accepted such a gift from an enemy. So I think that even if some Dwarves served Sauron in the War of the Last Alliance they must have already received their Rings of Power from him.
From Gundabad the Dwarf-kings could have returned to their homelands. There they passed on their Rings to their heirs for thousands of years. According to “The Tale of Years” in The Lord of the Rings dragons reappeared (in the knowledge of Elves and Dwarves) in the north around Third Age year 2570 and they began plundering the Dwarven kings’ hoards. Although Durin’s Line retained their Ring of Power, four others were consumed by dragons by the year 2845. Within those 300 or so years Sauron also seized the other two Rings of Power.
My guess is that Sauron probably captured the two Rings after the War of the Dwarves and Orcs ended in 2799. There is no textual support for this but all the Dwarven realms had been weakened by their losses in the war. If Sauron knew that any of the Rings were among those Dwarves returning to their homelands he could have waylaid them.