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Daniel, regarding the destiny of men, dwarves of hobbits, it's not said what happens with them, it's said that not even Manwe knows their fate after they die, the thought of them going with Iluvatar is only a presuncion.
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Actually, the dwarves themselves, being not one of the original Children at all, but created by Aule (although brought to true "life" by Illuvatar) believe that they go to a special place in Mandos set apart for them.