Dwarf Runes were first created by the elven loremaster Daeron of Doriath and were called Cirth or Certar Daeron. Daeron was inspired by the Tengwar script of Fëanor and wanted to create a new script for his Sindar kin. The dwarves learned the runes from the elves and adapted them for their own language Khuzdûl. The letters are thin and angular for they were designed for cutting or scratching on wood, stone, or metal. By the Third Age only the dwarves made regular use of them. The Cirth alphabet originally had nineteen characters which was sufficient for the Sindarin language. More were later added by the Noldor of Eregion to make it easier to express certain subtle sounds in their language. This full expansion of the script is generally called Angerthas Daeron or Angerthas Eregion. After the destruction of Eregion the elves generally ceased to use Cirth at all. Dwarves made their own variations of the script called Angerthas Moria and Angerthas Erebor.
Some dwarves knew a secret way of writing runes called Moon letters. These runes were written with a silver pen and could only be seen under the light of the moon. With the more advanced forms of Moon letters it had to be a moon of the same shape and season as the day when the runes were written.
The runes of the dwarves were adopted by Tolkien from the Anglo-Saxon and Scandinavian rune scripts.