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https://lotr.fandom.com/wiki

Aulë was an Ainu, a member of the Ainur (a.k.a. The Holy Ones), and was born from the creator, Eru Ilúvatar. He was endowed with knowledge of crafting and architecture. 

Aulë resides in Valinor with his wife, Yavanna. She is the Ainu in charge of guiding fruit and things that grow.

The Ainur were the first and strongest beings he created and are comparable to the Archangels from Abrahamic religions (Judaism, Christianity, & Islam).

The Ainur helped Eru Ilúvatar create the world, Arda, through the Music of Ainur.

After Arda's creation, the Ainur descended to guide its growth. Fourteen of the fifteen strongest became known as the Valar, who presided over Valinor, the elven paradise across the sea.

The last of the fifteen was Melkor, better known as Morgoth.

The other Ainur outside of the fifteen became known as the Maiar.

Before the Children of Ilúvatar (Elves) woke, Aulë created the Dwarves. Unfortunately, he was not Eru Ilúvatar and could not breathe life into his creations, who lived only while he actively willed it.

Unlike Melkor, Aulë submitted his work to Eru Ilúvatar, who asked why he usurped his authority. He admitted his impatience with waiting for the Elves to wake and his desire to pass on his knowledge to others.

Assuming that Eru Ilúvatar was displeased with him, he went to destroy the Seven Fathers of the Dwarves, but Eru Ilúvatar intervened and decided to give the Dwarves life. The dwarves were then set to sleep as Eru Ilúvatar ordained that the first people of Arda would be the Elves.

When the Elves woke, Aulë taught them how to smith as he was one. His most notable pupil was Fëanor, who later created the Silmarils (the round orb Saruman had in The Twin Towers) for communication.

Dwarves believe that when they die, their souls will go to Aulë and be set aside to rebuild the world after the Final Battle.