The realm of the dwarfs in Norse mythology is called Svartalfheim or Nidavellir. There are various families of dwarfs and they appear in multiple stories throughout Norse mythology. They are considered special beings, who usually have powerful magical properties. They are known to create powerful artifacts that even the gods could not fashion themselves, but they are also capable of other acts of magic.
In several stories, dwarfs are known to be able to shapeshift, just like some of the gods and giants. One famous example being Fafnir, although that was not really a transformation of his own will. One of his brothers, Otr, was often spending his life in the shape of an otter.
“Svartalfs” literally translates to “dark elves”, but we interpret these as being the same creatures as dwarfs. After all, they are short, proud people that are excellent (but greedy) craftsmen and live in underground homes. The name “Nidavellir” literally translates to “downward fields”, referring to their habit to live in underground homes.