The dwarves do not believe in a supreme being or pantheon of gods. They instead practice a form of living ancestor worship by way of naming Paragons, while also maintaining a close connection to "the Stone" that surrounds them.
Most dwarves live their whole lives in the Stone. They forge their home from her. They are protected by her. They claim to actually come from her, even calling themselves the Stone's children.
When the dwarves die, they say they return to the Stone. While those above ground may burn their dead or send them out to sea, deceased dwarves are buried. Paragons and nobility are typically interred within ornate crypts, while the remains of common dwarves are encased within stone cairns. Failing that they are buried in the dirt, though this is never ideal.
A dwarf who has achieved much- a great warrior, renowned craftsman, and especially a Paragon- is said to strengthen the Stone, while those who have shamed their clans are said to weaken her. A casteless or disgraced dwarf may out right be rejected by her.
Any dead dwarf returned to the Stone to become a guiding spirit who cares for his descendants for eternity. However the Stone is said to reject the worst transgenders. Their spirits are left to wonder remote caravans as Rock wraiths. These creatures appear often in dwarven children's stories, where they abduct lost miners and cause cave-ins, scaring young dwarves into good behavior.
Paragons
Paragon is the title given to the "living ancestors" dwarves recognize as so important, they are worthy of reverence as ancestors in their own lifetime. In traditional dwarven society, it is a rank bestowed only upon the greatest warrior, artisans, and smiths. Any house that has a Paragon relative is elevated to noble status.
The vote of a Paragon carries a great deal of weight in the dwarven Assembly, even though the title doesn't grant official power. Ozzamar honors Paragons with statues in the Hall of Heroes, revering them long after death. Giant statues tower over the caverns of Orzammar, imposing symbols of a dwarven Paragon's godlike status.
In Kal-Sharok, Paragon Elect is the highest elected government office. Kal-Sharok was isolated during the First Blight, and no longer recognizes a hereditary dwarven king. The practice of nominating Paragons evolved from recognition of past deeds. In Kal-Sharok the likeness of Paragons are not rendered as giant statues, but instead honored posthumously with carvings that subtly span vast lengths of the Deep Roads.