Yagrum isn't a dwarf he is a Dwemer, a ELF.Freechoice said:Yagrum Bagarn would like to have a word with you. [http://elderscrolls.wikia.com/wiki/Yagrum_Bagarn]
The Dwemer were a race of evil, psychotic, elves, who didn't believe in the gods, despite knowing the gods existed, and whose sole goal in life was the utter annihilation of the mortal realm through combining all their souls into a god-machine-robot and using it to destroy everything.
A far cry from the nice, drunken, Dwarfs of normal fantasy.
the dwemer are dwarfs only in name, their behavior, goals, and everything else about them were nearly 100% different then normal fantasy dwarfs.