I already posted it in the boards, so here's my own one. Maybe not too original. Source: Orson Scott Card's "Wyrms" novel.
Dwelves are shorter than both elves and dwarves, much like a tigone's littler than a male tiger and a lioness- differently from Muls, that grow higher than both dwarves and humans. They're often mistaken for gnomes or halflings. They appear as shorter, thinner and jolly dwarves with no beards, pointy ears and a loud laugh. Dwelves are highly resistant to magic, as a result of the mixing of a magic race and a magic-resistant race, but they tend to be not very smart, due to the contrasting mindsets of their parent races. Some of them are raised among dwarves or elves, not discriminated but viewed as strange and unfitting; most are children of travelling parents, and travellers on their own right for a whole life, in search of a place to settle and integrate.
Dwelves love a good meal and drink, and a good story before a fire; many become bards, fascinated from ancient racial lore, maybe because they haven't a racial lore of their own.
+2 Dex, +2 Cha, -2 Int (0): Dwelf characters are swift in their moves and surprisingly nice, but somehow forgetful and distracted due to the contrasting mindsets of their parent races.
Small (0): Dwelves are Small creatures and gain a +1 size bonus to their AC, a +1 size bonus on attack rolls, a –1 penalty to their Combat Maneuver Bonus (CMB) and Combat Maneuver Defense (CMD), and a +4 size bonus on Stealth checks.
Normal Speed (0): Dwelves have a base speed of 30 feet.
Low-Light Vision (1): Dwelves can see twice as far as humans in conditions of dim light.
Defensive Training, Lesser (1): Dwelves get a +4 dodge bonus to AC against monsters of the giant subtype.
Device Dabbler (2): Dwelves receive a +2 racial bonus on Use Magic Device skill checks.
Integrated (1): Dwelves gain a +1 bonus on Bluff, Disguise, and Knowledge (local) checks.
Keen Senses (2): Dwelves receive a +2 bonus on all Perception skill checks.
Mixed Blood (0): Dwelves count as both dwarves and elves for any effect related to race.
Sociable (1): When dwelves attempt to change a creature’s attitude with a Diplomacy check and fail by 5 or more, they can try to influence the creature a second time even if 24 hours have not passed.
Spell Resistance, Lesser (2): Dwelves gain spell resistance equal to 6 + their character level.
Languages (0): Dwelves begin play speaking Common, Dwarven and Elven. Dwelves with high Intelligence scores can choose from the following: Celestial, Draconic, Gnome, Sylvan, Terran, and Undercommon.
Alternate Racial Traits: Ancestral Arms (one elven or dwarven weapon), Beguiling Liar, Craftsman, Curiosity, Dual Minded, Gift of Tongues, Gregarious, Lorekeeper, Silent Hunter, Sprinter, Stonesinger, Stubborn, Woodcraft.
Alchemist: Dwelves make surprisingly good alchemists, considering that neither of their parent races favors much this path of life, and their own distractful nature. Many of them hope to find in mutagens the physical and psychical power they lack.
Barbarian: The very concept of a barbarian dwelf can make many laugh. Actually, due to their small size and peaceful nature, very few choose this class. Those few ones are often driven by rage against a family or a society that refused them.
Bard: The bard’s life seems the natural choice for dwelves, who fulfill this way their love for song, travel, drinking and carousing. They’re expecially fascinated by ancient lore and racial legends, maybe because they haven’t a racial history of their own.
Cavalier: A dwelf cavalier seems improbable just as a barbarian, but there are actually a bit more cavaliers than barbarians in the race. They mostly bond with ponies or large dogs as mounts, and tend to be knights errant.
Cleric: Dwelven clerics tend to worship elven or dwarven racial gods, or deities of patience and tolerance. Most choose minor deities as their protectors, as they don’t feel at ease in mighty and large churches.
Druid: A dwelf that believes to find in nature the peace and relief he longs for often retires in woods or deep underground caves and becomes a druid. Dwelf druids tend to be hermits, keeping themselves hidden to outsiders and protecting the environment where they chose to take refuge.
Fighter: Dwelves may seem not very physically adept, but are stronger than most Small races due to their dwarven blood, and many of them must learn to defend themselves against an hostile world. These may embrace a fighter’s life and be quite good at it.
Gunslinger: Often, you can better defend yourself shooting your enemy before he can come near enough to hit you with his sword. Those dwelves who think this way become gunslingers, and can surprise many a foe with their good aim.
Inquisitor: The most rancorous of dwelves take the inquisitor’s path, and while not many in number, they are relentless in their chases. Often they choose to track and bring to justice dwarf and elf criminals.
Magus: Few dwelves have enough patience and force of will to combine wizardly magic with the force of arms. Those dwelves that become magi choose most often witchy or sorcerous archetypes.
Monk: Quite a few dwelves choose to use their bare hands to defend themselves rather than a sword or a gun. They become highly skilled monks, also due to their high Dexterity.
Paladin: Most dwelves are too bound to defend themselves to defend others, but those chosen souls who pledge to relieve their fellows from the suffering that they have had to pass make surprisingly lethal paladins. Don’t laugh lightly of a dwelf paladin unless you want to eat back your laugh on the point of his lance.
Oracle: It’s more likely for a dwelf to be chosen by a god (often against his will) than to choose to serve a god himself. The most frequent mysteries among dwelven oracles are ancestors, elements, lore, nature, time and wood.
Ranger: Dwelf rangers do more than seek peace and relief in nature: they seek and help travelers and people in need, lost in their chosen terrains, as they are lost in a world of different races. Dwelven rangers can be found in every terrain, even in a big city.
Rogue: Dwelves may often be forced to live a life of expedients and little thefts, be it in a city, in a wood or underground. They may easily disguise themselves as children of other races to avoid suspects; in this they’re better even than halflings.
Sorcerer: Dwelves sorcerers have a rich diversity of bloodlines from both their parentages, from fey to deep earth to elemental to draconic to geniekind. Crossblooded sorcerers are all but rare, choosing to favor both their paternal and maternal line.
Summoner: Many dwelves have quite a bit of imagination, and in their childhood create imaginary friends to relieve their sense of solitude. Once grown up, they can give those fantasies a more concrete body as a summoned eidolon.
Witch: Dwelf witches are far more numerous than wizards. While concentrating on arcane spells is not their strong point, dwelves can find the security they long for in their pact with a mysterious power and a familiar rather than in nature or in arms.
Wizard: It’s not frequent for a dwelf to take on the secluded and highly concentrated studies of the wizard. Those dwelves who work hard to exceed their limits can become enchanters or illusionists, but abjuration and conjuration too meet a dwelf wizard’s tastes.
Favored Class Alternatives
Instead of receiving an additional skill rank or hit point whenever they gain a level in a Favored Class, dwelves have the option of choosing from a number of other bonuses, depending upon their Favored Class. The following options are available to all dwelves who have the listed Favored Class, and unless otherwise stated, the bonus applies each time you select the listed Favored Class reward.
Alchemist: Add 1/4 minute to the effect time of mutagens created by the dwelf.
Bard: Add 1 to the dwelf’s total number of bardic performance rounds per day.
Druid: Select one cleric domain power at 1st level that is normally usable a number of times per day equal to 3 + the druid’s Wisdom modifier. The druid adds 1/2 to the number of uses per day of that domain power. For dwelf druids whose nature bond gives them an animal companion, add +1/4 feat to the animal companion. If the dwelf ever replaces her animal companion, the new companion gains these bonus feats.
Ranger: Add +1/4 feat to the ranger's animal companion. If the dwelf ever replaces her animal companion, the new companion gains these bonus feats. For dwelf rangers whose hunter bond is with their companions, add +1/4 round to the duration of a favored enemy bonus granted to the ranger’s companions.
Rogue: Add a +1/2 on Bluff checks to feint, +1/2 on Diplomacy checks to gather information, and +1/2 on Disguise checks to appear as an elven, half-elven, dwarven, or human child.
Summoner: Add +1/4 feat to the summoner's eidolon.
Sorcerer: Select one bloodline power at 1st level that is normally usable a number of times per day equal to 3 + the sorcerer’s Charisma modifier. The sorcerer adds +1/2 to the number of uses per day of that bloodline power.
Witch: Add +1/4 feat to the witch's familiar. If the dwelf ever replaces her familiar, the new companion gains these bonus feats.