Alliance BrokenAlliance Broken - With the death of Thingol at the hands of the Dwarves (see above), the alliance between Dwarves and Elves in the First Age was officially over.  Not just over, but the two races had become instant enemies and went to war.  After they killed Thingol, the Dwarves grabbed the necklace, Nauglamir, and fled homeward.

 

"But tidings went swiftly through the forest, and few of that company came over Aros, for they were pursued to the death as they sought the eastward road; and the Nauglamir was retaken, and brought back in bitter grief to Melian the Queen.  Yet two there were of the slayers of Thingol who escaped from the pursuit on the eastern marches and returned at last to their city far off in the Blue Mountains; and there in Nogrod they told somewhat of all that had befallen, saying that the Dwarves were slain in Doriath by command of the Elven-King, who thus would cheat them of their reward.

 

"Then great was the wrath and lamentation of the Dwarves of Nogrod for the death of their kin and their great craftsmen, and they tore their bears, and wailed; and long they sat taking thought for vengeance...and ere long a great host came forth from Nogrod, and crossing over Gelion marched westward through Beleriand." ~The Silmarilliion, chap. 22 (Of the Ruin of Doriath)

 

The Dwarves are stalwart warriors, and they caught the Elves unawares.

 

"Thus it was that the host of the Naugrim crossing over Aros passed unhindered into the woods of Doriath; and none withstood them, for they were many and fierce, and the captains of the Grey-elves were cast into doubt and despair, and went hither and thither purposeless.  But the Dwarves held on their way, and passed over the great bridge, and entered into Menegroth; and there befell a thing most grevious among the most sorrowful deeds of the Eldar Days.  For there was battle in the Thousand Caves, and many Elves and Dwarves were slain; and it has not been forgotten.  But the Dwarves were victorious, and the halls of Thingol were ransacked and plundered." ~The Silmarilliion, chap. 22 (Of the Ruin of Doriath)

 

And the great city of Menegroth lay in ruins.