"Gandalf, why is the Balrog so scary?" Frodo asked. He still wondered how Gandalf had beaten the thing. It had been scary. Giant flaming things generally were.
"Well, Frodo, it's easy. Let me explain how the Balrog became the monster it is today..."
The balrogs had once been elves. Every corrupt thing was once an elf. Stupid elves. Anyway, they lived happily and peacefully in the mountains in the north. They were great at making things out of leather, especially whips. They were sort of like hobbits; they weren't really talked about because they weren't very interesting. The balrogs were driven out of the mountains by one particularly fierce storm, and that is how they came to Moria. They were going to go over Caradhras when they saw a sign. "Help Wanted," it said. They looked at each other and then read on. "Inquire Within." They looked all around and couldn't find any Within. They were about to give up when the moon shone in its tricky little way and showed them the door into Moria. One among them could read Dwarfish runes, and he translated the password hint. Since these were ordinary folk and not wizards, they figured it out right away. Once they were inside, they followed their ears to a company of dwarves who were quite busy feasting. Having never before seen an inebriated dwarf, the balrogs stared. They were approached by a small group of dwarves who still seemed to possess all their faculties.
"Who are you and what do you want?" they demanded. They were waving their axes around, so the leader of the balrogs answered quickly.
"We are balrogs. We have come to help."
"There's a Help Wanted outside."
"Oh. That. We need help in the deep parts of the mines. Some dwarves are scared to dig down there. You up for it?"
The leader of the balrogs looked around. It was warm and there was food, sand none of the other balrogs looked like they particularly wanted to leave, so...
"Sure. When do we start?"
"Tomorrow? Maybe. I'm not sure. I'll ask Laguz tomorrow. He'll be your boss, but he's passed out right now. Go eat and we'll get you settled tomorrow."
Having traveled a long way, the balrogs fell onto the food with relish.
Morning came, and Laguz was not happy to be saddled with some new guys who probably couldn't tell which end of the pickaxe was supposed to hit the rock. That and he had a massive hangover. He set the balrogs to work where they probably wouldn't find anything, but where they couldn't mess anything up either. They set to work eagerly, happy to be out of the cold and wet. Here, it was nice and warm. They dug steadily for hours until a different dwarf called them for a lunch break. Laguz inspected their work while they were gone. He and the head foreman were impressed. They decided to set the balrogs to work in the deeper tunnels since they didn't seem to mind the heat or depth like the dwarves did.
Months later, the balrogs had mined tons of mithril. The dwarves were happy. They didn't even notice that the balrogs were changing. The balrogs hardly slept anymore, driven by their work and by the touch of the near-molten iron and the still-cool mithril. Their body temperature had gone up so high it was uncomfortable for them to leave. A few even caught on fire. The fire didn't seem to bother them, and they kept working. They ate less, too. They got taller and heavier, and the fire began to consume them. It still didn't seem to burn them. It didn't seem to burn anyone else either. They continued to mine the mithril.
One day, the mithril ran out. The balrogs were enraged. They stormed the dwarves, driving them out. They were alone. The balrogs carefully picked up the piles of mithril and moved them back down to the deep. The dwarves were gone. They were the ones who made the heat-resistant toothbrushes for the balrogs. Their teeth turned black, and heat-resistant plaque grew in their mouths. They died and gave way to heat-producing plaque that turned their mouths into an inferno of halitosis. When they cracked their fiery whips, it was their breath that struck fear into the hearts of the explorers who had come to Moria. The orcs and goblins moved in; they were immune to halitosis, as their dental plans didn't cover the drastic dental overhaul they needed.
"What? That's it? How did you beat it, Gandalf?"
"Well, Frodo, I'm a wizard. He tried to meddle in my affairs, so I was subtle and dropped an icy mint into its mouth."