While most elves are viewed as beautiful and generally well-meaning, the Svartalfar (Dark Elves, also called Night Elves or Black Elves) are quite the opposite. Millennia ago, they turned to the Demon Lords of the Underworld for greater power, becoming masters of the dark arts. Banished from their original homes, most now dwell deep in Nidavellir, far from the sight of Midgard. They have colorless skin, either ashen grey or black as pitch, due either to living underground or their corruption from dark magic, or both. They are not known for their kindness.
The majority of the svartalfar dwell in immense underground cities in Nidavellir, built inside of great stalactites and stalagmites, sometimes reaching higher than the tallest human castles. These dark cities are lit primarily by glowing crystals, and sometimes runic flames and glowing mushrooms that are the natural flora of Nidavellir. The dark elves are shunned by all surface-dwelling races, including all other elves, and they like it that way. Their greatest enemies are other subterranean races who compete with them for territory, particularly dwarves and goblins. Sometimes they even dispute with dragons over territory and treasure.
While the relationship is not always what one would call "worship," the svartalfar "religion" is based around demon lords, with many dark elf houses having a patron demon lord, to whom they pledge their service and often their souls in exchange for power. They typically do not view them as "gods," however. Many dark elves worship no god at all, but most do pay homage to the gods of death who rule the Underworld and thus have power over demons. Thanks to the demonic rituals and demon binding deeply ingrained in svartalfar culture, many dark elves are either practitioners of demonic magic or are at least very knowledgeable in it. However, most dark elves turn their noses up at outright necromancy - the reanimation of shambling corpses - preferring to summon and bind actual demons to their will.
As mentioned, svartalfar consider themselves above demons in general. Though they would not dream of directly defying a demon lord, dark elves have played the games of trickery and temptation with demons for years, and they have mastered the art of winning the demons' bargains. As such, summoned demons in dark elf cities are bound to serve their masters or merely trapped in one location to show the power of a noble house, not allowed to wander as they please. Though many - perhaps all - dark elves have some demonic blood in their veins, the practice of copulating with a demon is highly frowned upon, as it usually means a foolish dark elf fell for a demon's seduction. Also, dark elf demon-kin are no stronger than others at resisting the temptations of their demonic blood, meaning they usually simply become another demon.