Thorin’s company consists of a band of twelve dwarves (Fili, Kili, Dwalin, Balin, Oin, Gloin, Ori, Dori, Nori, Bifur, Bofur, and Bombur) who are journeying to the Lonely Mountain to reclaim their homeland and recover the Arkenstone. Readers meet the dwarves in the novel’s opening chapter when they descend upon Bilbo’s hobbit-hole. It soon becomes clear that Gandalf has volunteered Bilbo to be a “burglar” for the dwarves on their adventure. 

As a unit, the dwarves have two major functions in the novel. To begin with, their shifting attitude towards Bilbo reflects his growing hero status. The dwarves are initially skeptical of Bilbo, believing that a soft little hobbit with no obvious skills seems ill-suited to their high-stakes adventure. However, Thorin’s company eventually comes to see that Gandalf was correct when he insisted there was more to Bilbo than meets the eye. For example, after Bilbo manages to escape from the goblins and sneak into the dwarves’ camp undetected, Tolkien writes, “Bilbo’s reputation went up a very great deal with the dwarves after this. If they had still doubted that he was really a first-class burglar, in spite of Gandalf’s words, they doubted no longer.” By the end of their quest, the dwarves have come to respect Bilbo. They depend on him for both common sense and salvation during the episodes with the spiders and the elves in the Mirkwood Forest. The dwarves’ evolving perception of Bilbo is an integral part of Bilbo’s  journey, as the dwarves provide a form of commentary on Bilbo’s transformation from simple hobbit to full-fledged hero. 

Tolkien also uses the dwarves to comment on the dangers of greed. Many of Middle-Earth’s races have defining characteristics: goblins are evil, hobbits are simple, elves are wise, etc. A lust for gold is the defining characteristic of all Middle-Earth dwarves. As the dwarves get closer to their long-lost treasure, they become more arrogant and stubborn (as when they refuse to talk to the Elvenking) and they make poorer decisions (as when they are reluctant to leave the gold in Smaug’s chambers so they may find a place to hide). The dwarves’ greed continues to grow until all of them (with the exception of Bombur, Fili, and Kili) side with Thorin and do not want to give any of their reclaimed treasure to the people of Lake Town. Characterizing the dwarves in such a way allows Tolkien to warn against the destructive, all-consuming power of greed. Once Smaug has been eliminated, the external threat represented by the dragon gives way to the internal threat that is greed, turning the dwarves and the people of Lake Town from friends to foes.

However, Tolkien does not condemn the dwarves entirely. On the contrary, Thorin’s dying epiphany that “if more of us valued food and cheer and song above hoarded gold, it would be a merrier world” proves that there is hope for the dwarves and Middle-Earth in general.