Indeed no one knows what will really happen at the end of the world, it is only prophecy, and a varied one at that.
But to touch on a few things earlier in the thread, Suldaledhel said that Eru considered the death of men a gift; this is not correct. It is the elves who consider death a gift, and it is called the "Gift of Iluvatar" because the story is elf-centered, and they are at times jealous of it. However, it is not a "doom" as it might be called by men either, as can be seen in the death of Aragorn and others, and in the idea that in the Timeless Halls they will no longer suffer the grief of Arda.
Also, it was discussed earlier that Dwarves go to the Halls of Mandos in hall set apart by Aule after they die. However this is given only as the "belief" of the dwarves; the elves held that the dwarves returned to stone after their death, which although also wrong, would have the same validity as the dwarves' belief.
In Letter 212 Tolkien writes, "And of the fate that Iluvatar has set upon the children of Aule beyond the Circles of the world Elves and men know nothing, and if Dwarves know they do not speak of it." This is given as the actual fate of dwarves, rather than just the opinions of beings who aren't in a position to know it.
Ultimately, it makes the most sense that Dwarves would be removed from Arda after their death. They die naturally like men, so it would be assumed that their spirits are mortal in the entire Tolkien idea of the word: they only live in Arda while incarnated. Also, in Letter 154 Tolkien writes of the Hobbits and Gimli passing to the Undying Lands, and then says that "cannot abid for ever, and though they cannot return to mortal earth, they can and will 'die' - of free will, and leave the world." Although Gimli is not explicitly included in they, he is definitely included in the antecedent to "they."
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"He was sent by a mere prudent plan of the angelic Valar or governors; but Authority had taken up this plan and enlarged it, at the moment of its failure."
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