I have shown you many of the places where these stories took place, and shown you quite a few rocks that are habitations of the elves, even one in Reykjavík close to my home.
There is some mention in our folklore of rocks where dwarves reside, not many, though. The best-known dwarf story tells us about the dwarf rock in Seyðisfjörður in the Eastfjords.
Now let's visit one such place in the Westfjords of Iceland.
Dvergasteinn farm and Dvergasteinn rock
In Álftafjörður fjord in the Westfjords, you will find a farm by the name Dvergasteinn.
Across the road from the farm, I visited a rock that is thought to be the habitation of dwarves.
We don't know what the farm was called before the folklore took place, but after the encounters with the dwarves, it was named Dvergasteinn - the Rock of the Dwarfs.
I startled some sheep by the dwarf rocks.
The inhabitants of Álftafjörður - the Swan fjord- knew that some dwarves lived in this rock and protected it.
The same precautions and respect apply to the habitation of dwarves as we must show to the habitation of the elves - the hidden people of Iceland.
And woe to those who don't respect the supernatural beings and hidden people of Iceland. In Icelandic folklore, you will find a myriad of stories about the revenge of the elves.
Approaching Dvergasteinn rock, after asking for permission to visit it
The story goes that some of the farmers' wives placed a good hearty meal by the rock at the ingathering at Christmas and on the Epiphany.
They said these words: "Geri sér að góðu þeir, sem í steini búa! Viljum við með vinsemd vættir góðar hylla!" meaning: "Bon appétit to you who reside in this rock! We want, with gratitude, to pay homage to you gracious powers!".
One woman didn't respect the sanctity of the rock, and this disrespect was avenged. She got a bad eyeache and saw the errors of her way. Ref. Sagnagrunnur.
In Raggagarður family park in Súðavík village, you will find a replica of the Dwarf rock.
Another story tells us about a dwarf living in Mt. Bardagi (Mt. Fight).
This dwarf had a dispute with the farmer on the other side of Álftafjörður fjord.
Dwarves, when shown disrespect, want revenge, and this dwarf threw three big rocks across the fjord at the farm. Fortunately, none of the three rocks hit the farm. 
Dvergasteinn rock and Dvergasteinn farm
In yet another account, we are told about two dwarves on each side of the fjord.
They were battling, and one of the dwarves threw the rocks across the fjord at the other dwarf.
(Ref. Page 32 in the essay of Davíð Pétur Steinsson.)
The rocks are right next to the road in Álftafjörður fjord
You can visit the dwarf rocks, which are right next to the road in Álftafjörður fjord. Always ask them in your mind beforehand for permission to approach their rock, and show respect.
No racket is allowed near the habitation of the supernatural beings of Iceland.
Respect and good deeds are, on the other hand, often rewarded, and I have been on the receiving end of a gift from the hidden people in West Iceland.
By Dvergasteinn rock
I have shown you a couple of other places where dwarves reside in Iceland, in the Eastfjords and in South Iceland:
Dvergasteinn - the Rock of the Dwarfs - by Seyðisfjörður in East Iceland - Icelandic Folklore
The beautiful Waterfall Foss á Síðu and the Dwarfs in Dverghamrar Cliffs in South Iceland
The dwarves and hidden people of Iceland only appear to people if they want to be seen or heard. I have only once seen a house elf when I was a little girl, but I sometimes hear bells or talking by elf churches or elf rocks.
Have a lovely time in Iceland :)
