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Dwarves are my favorite race, and I usually use the same upgrade types for them.
Level 1 - Shields, definitely red ones, they help both in breaking through defenses and in the final battle.
Level 2 - I prefer harpoons here because they have higher damage. Another upgrade needs a soldier, which doesn't always fit the dwarves, and the ability to pull back a defender or drag an enemy into a wall of fire is much more useful than the random chance of inflicting damage.
Level 3 - Bears, both types are good, but if you have a soldier, white bears are better because they often scare both the attacking stack and the adjacent ones.
Level 4 - Arkat warriors, their stunning aura and giant killer ability are much more useful in the final battle, and often this seemingly non-main stack decides the outcome of the battle.
Level 5 - Priests, I usually take those who shoot "crosses," even though the damage is less, they hit adjacent stacks, which is usually very painful. Plus, the wall of fire, into which harpoons can drag the target, inflicting additional damage.
Level 6 - Usually, I still take Jarls, the fire strike hits hard, plus it applies the fire mark, which then helps the priests, and the hero if he is in Chaos. Also, fire immunity allows the hero to play around with Armageddon, both when breaking through defenses and in the final battle.
Level 7 - It doesn't matter, but I usually take those who leave a trail of fire. When half the field is on fire in the final battle, it's impressive)), it's useful against orcs - it removes rage, and it also helps against phantoms.
This is just my personal opinion, which has developed over years of playing with this race; there are other options as well