FR11 Dwarves Deep, p. 4 wrote:The Doom Of the Dwarves
The tragic `secret` of the dwarves is their low birthrate. Fear of clan extinction sometimes drives dwarves to raid human settlements for mates, or even to deal with slavers. The dwarves are usually in search of human women, because the low dwarven birthrate is thought to be due to low fertility among dwarven women.
The offspring of a human and a dwarf is always dwarven enough to pass for a true dwarf (although it may be a foot taller than other dwarves). Any offspring it may in turn have with a dwarven mate will be fully dwarven, reverting to usual dwarven height. The taking of human mates is "the secret salvation of the race" referred to by some dwarven elders.
FR11 Dwarves Deep, p. 6 wrote:Halfbloods
Humans, gnomes, and halflings are cross-fertile with dwarves. Elminster says elves and dwarves can have issue as well. Common in Ardeep, Eaerlann, and Myth Drannor of old, this is unheard-of today. Mates who respect dwarven customs and traditions are honored for their courage (in entering a strange society), loyalty (to the customs of dwarves) and aid (in preserving the Folk).
"Half-dwarves" are not a distinct race. Save for their height (a head taller than most dwarves) all offspring of unions between dwarves and other races look and act (and are treated in the rules) as pureblood dwarves. Dwarven halfbreeds always have the stocky build and hirsute appearance of purebloods.
If halfbloods mate with pureblood dwarves, the offspring will be a pureblood. If halfbloods mate with another halfblood or a nondwarf, the offspring will be a halfblood.
The quote, "...elves and dwarves can have issue as well. Common in Ardeep, Eaerlann, and Myth Drannor of old, this is unheard-of today" refers to half elf-dwarf hybrids as being "unheard-of", and is not referring to half human-dwarf hybrids which are common enough to earned six paragraphs in two sections of the book.
~grym
p.s.
(Muls (i.e. "Mules"), they are Athasian (Dark Sun) half-dwarves and are sterile.)