Thus Finrod came to the Caverns of Narog, and began to establish there deep halls and armouries after the fashion of the mansions of Menegroth; and that stronghold was called Nargothrond. In that labour Finrod was aided by the Dwarves of the Blue Mountains; and they were rewarded well, for Finrod had brought more treasures out of Tirion than any other of the princes of the Noldor. And in that time was made for him the Nauglamir, the Necklace of the Dwarves, most renowned of their works in the Elder Days. It was a carcanet of gold, and set therein were gems uncounted from Valinor; but it had a power within it so that it rested lightly on its wearer as a strand of flax, and whatsoever neck it clasped it sat always with grace and loveliness.

(Silm, Chapter 13, Of the Return of the Noldor)

Húrin made no answer to the King, but drew forth from beneath his cloak that one thing which he had taken with him out of Nargothrond; and that was no lesser treasure than the Nauglamir, the Necklace of the Dwarves, that was made for Finrod Felagund long years before by the craftsmen of Nogrod and Belegost, most famed of all their works in the Elder Days, and prized by Finrod while he lived above all the treasures of Nargothrond. And Húrin cast it at the feet of Thingol with wild and bitter words.
'Receive thou thy fee,' he cried, 'for thy fair keeping of my children and my wife! For this is the Nauglamir, whose name is known to many among Elves and Men; and I bring it to thee out of the darkness of Nargothrond, where Finrod thy kinsman left it behind him when he set forth with Beren son of Barahir to fulfil the errand of Thingol of Doriath!'
...
At that very time great craftsmen of Nogrod were lately come into Doriath; and the King therefore summoning them declared his desire, that if their skill were great enough they should remake the Nauglamir, and in it set the Silmaril. Then the Dwarves looked upon the work of their fathers, and they beheld with wonder the shining jewel of Fëanor; and they were filled with a great lust to possess them, and carry them off to their far homes in the mountains. But they dissembled their mind, and consented to the task.
Long was their labour; and Thingol went down alone to their deep smithies, and sat ever among them as they worked. In time his desire was achieved, and the greatest of the works of Elves and Dwarves were brought together and made one; and its beauty was very great, for now the countless jewels of the Nauglamír did reflect and cast abroad in marvellous hues the light of the Silmaril amidmost.
...
...Beren took the Nauglamír and returned to Tol Galen. Little did it ease the grief of Luthien to learn that the Lord of Nogrod was slain and many Dwarves beside; but it is said and sung that Luthien wearing that necklace and that immortal jewel was the vision of greatest beauty and glory that has ever been outside the realm of Valinor; and for a little while the Land of the Dead that Live became like a vision of the land of the Valar, and no place has been since so fair, so fruitful, or so filled with light.

(Silm, Chapter 22, Of the Ruin of Doriath)

Nauglamír - 'The Necklace of the Dwarves', made for Finrod Felagund by the Dwarves, brought by Húrin out of Nargothrond to Thingol, and the cause of his death. 134, 285-7, 291

mír - 'jewel' (Quenya mírë) m Elemmíri, Gwaith-i-Mírdain, Míriel, Nauglamír, Tar-Atanamir.

Naugrim - 'The Stunted People', Sindarin name for the Dwarves. 103-5, 107-9, 132, 159, 161, 231, 236, 289

(Silm, Appendix)