A race of Dwarfs or "Dark Elves" that inhabit the underground realm of Nibelheim. They include Alberich and his brother Mime. They are smiths who happily forge, but when Alberich forges the ring he enslaves the Nibelungs and forces them to mine treasure. He plans to eventually enslave the world with a Nibelung army (which may or may not be synonymous with Hella's army which Alberich later invokes). Mime is forced to forge the tarnhelm, with which Alberich turns invisible and torments him.
He tells the Nibelung that with this power they will never be able to go against him. However the Gods Wotan and Loge capture Alberich and take him to the mountains, hoping to take the treasure, tarnhelm, and ring of Alberich to the Giants Fafner and Fasolt for building Valhalla. Alberich summons the Nibelungs to bring his treasure. Nibelheim falls into disarray, with Alberich and Mime going abroad. Alberich continues to plan to get the ring. Hagen is half-Nibelung as his father is Alberich, who bore him with Queen Grimhilde to recover the ring.
The Nibelungs' fate is unclear, although all other mythological races (except for the Rhinemaidens) perish by the end of the cycle, and it may be that Nibelheim is likewise undone by the burning of Valhalla, being linked to it via the Sulphorous Cleft.