What happened during the battle is rather obscure since there are many sources that clash with each other. However, his actions somehow caused the entire Dwemer race to disappear from Tamriel. It is during this battle in Dumac Dwarfking's citadel (soon to become the headquarters of Dagoth Ur) that Kagrenac is supposed to (according to some sources) have used his tools upon the Heart of Lorkhan in order to strengthen the Dwemer and win the battle.
This famous battle, paving the way for the formation of 'modern' Morrowind, took place around 1E 700, towards the end of the War of the First Council between the Chimeri (led by Nerevar) and the Dwemeri (led by Dumac Dwarfking). Dagoth Ur's reign came about after the Battle of Red Mountain.
Originally Voryn Dagoth, he started as one of Nerevar's closest friends and advisor.
