Having done with the human classes in the first 4 parts of the Race as Class articles, now we’re moving on to the demi-humans: dwarfs, elfs, and halflings. As always, check out the ground rules for conversion. And now, the B/X dwarf.
Moldvay describes dwarves  as “short, stocky demi-humans” who “value good craftsmanship, and are very fond of gold.” (B9) Later in the same paragraph, Moldvay goes on to say that they’re “sturdy fighters and are especially resistant to magic.” Like fighters, dwarves use a d8 for hit dice and wear any type of armour; they’re able to use any weapon except a long bow or two-handed sword (which I broadly interpret to mean any two-handed weapon taller than them).
Mechanically, a dwarf is a fighter (albeit limited to 12th-level) , but with special abilities, including infravision (60’) and the ability to detect sloping passages, traps, shifting walls, and new construction with a 2-in-6 chance of success. In addition to Common and Dwarvish, they speak gnome, kobold, and goblin.
Clearly reminiscent of Tolkein, the dwarf is a hallmark of the genre, and I can’t imagine not having them as a character option. But the archetype is strong: Most times, you see them in the campaign as proud custodians of ancient underground cities where they spend all available energies hammering away at some anvil to make an endless supply of superbly crafted weapons/armour/lockpicks out of whatever miraculously abundant strategic/precious metal vein they’ve discovered. Also, they live exclusively on fungus and cave lizards.
At least that’s the way I remember them. That’s the tricky thing about demi-humans—it’s really hard to disassociate the stereotypes, and as a result, most campaigns with demi-humans feature them either as iconic races based on popular literature or as super-freak wingnuts so far shifted in the other direction that they're completely foreign (e.g., dwarfs in my campaign dwell in sea caves where they mine salt from the deep waters, using eel-powered submersibles fashioned from giant conch shells. Also, they live exclusively on dolphins and kelp). 
Meanwhile, back in 80% of the D&D campaigns I’ve seen, dwarves are great assets in the dungeon. In fact, underground, they’re better fighters than fighters: infravision, detecting underground stuff, and the ability to speak the language of common 1st-level foes, gives them a definite edge.
A subterranean race, dwarfs are a sturdy people with an affinity for mining and craftsmanship and a lust for precious metals and gems. Since their beginning, dwarfs have struggled against the horrors of the Underworld. Few non-dwarfs know of them, or the protection they provide, which instills in dwarfs no little resentment for the soft "toplanders" who live on the surface.
Advancement Cost 
Move Rate: 8”±1d4
Wound Limit: 1d8
Abilities: Athletics, Fight, Shoot, Spelunking
Perks: Deep Ways (see below), Healthy, Infravision, Insulation
Flaws: Restricted Weapons (medium or smaller)
Special Perks (Sperks)
Buttress: Double the DF of armour worn (melee only)
En Garde: Increase Parry by Fight AR (melee only)
Enemy Mine: Increase attack ARs vs. specific foe by level
Mighty Blow: Upgrade the damage of melee weapons by 1 die
Sweep: Attack a number of melee targets equal to Fight AR each round; no movement permitted after first strike
This is identical to the Dwarf Sperk of the same name (CB/6), which grants a +1/level bonus to all Action Rolls made underground.
Having said a lot about the dwarf stereotype, I realise this is simply the Moldvay dwarf held up to the Chimera mirror. But that’s intentional, as I believe any real variation would have to be based on setting-specific details. That said, how have you varied dwarfs in your campaign?
I prefer “dwarfs,” but I’m sticking with Moldvay’s terminology. Informal poll: which do you prefer, and have there been arguments about it during a game?
I’ve always house-ruled my way around this, allowing demi-humans to advance beyond 12th-level to improve abilities, but where experience level (as a value) is concerned, they’re capped at 12.
Which is fine, too. So long as they aren’t in the Gen-2 Stereotype wearing kilts and playing bagpipes...
My target AdCost is 9 (2,200XP / 250 = 8.8 = 9).
Moldvay, Tom, ed. Dungeons & Dragons Basic Rulebook. Lake Geneva: TSR Hobbies, Inc. 1981.
Smale, Erin. Chimera Basic. Atlantic Highlands: The Welsh Piper. 2011.