Board Thread:General Discussion/@comment-79.173.235.16-20140131103945/@comment-24902649-20141204145616

I believe the same-- that they're trapped in a plane of Oblivion that they fled to as they were overrun by the Falmer.

But I also think bringing them back as a whole race, along with whatever technology they brough with them and anything they made while trapped, would turn TES into a steampunk-y mishmash of technology, magic, and stupidity (a la Final Fantasy). It would be better if you found a single surviving Dwemer, and have to help them rejoin their race so they can be the one to save Mundus, this time around.