The Notion Club Papers - an Inklings blog

It is striking that the possession of the One Ring is rejected by even the most good and most powerful characters of The Lord of the Rings. 

Gandalf decisively rejects the idea of being given The Ring with mingled horror and almost panicked fear; Galadriel is tempted but triumphantly allows herself instead to decline in power and prestige, departing from Middle Earth rather than take The Ring; Elrond does not even allow himself to consider the idea - Aragorn likewise (Tom Bombadil seems completely uninterested, so the question does not really arise.) 

What is striking is that it is made clear that the corrupting evil of the One Ring cannot ever, under any circumstances, be long resisted by anyone who could and would be able to use it - and this is true no matter how strong and noble their nature and intentions really are. 

This is a powerful conclusion; because it implies that nobody is, or could be, good enough to resist evil - and on the surface it seems to imply that evil always has the upper hand in the spiritual war. 

If the One Ring is indeed so strong that the best and highest are susceptible - then there seems to be no ultimate hope for good. 

Evil seems decisively more powerful, and must eventually prevail... 

But closer examination shows that that this would be a mistaken analysis. When somebody has taken the One Ring to use it, and then tries to resist its corruptions; we are not dealing with two distinct sides of Good versus evil - but are instead already inside the realm of evil; from which position resistance is actually attempting to hold-a-line for lesser-evils against greater evils; but all this happening after the side of evil has been-joined.

The reason why nobody is strong or good enough to resist the One Ring is that by claiming The Ring they have already chosen not to resist its power. 

Anyone who claims the One Ring has - by that act - opened the door to evil, and invited it inside.  

After that point - with the enemy already loose inside the castle keep - resistance will fail sooner or later. 

Apparently, Sauron reclaimed three of the seven dwarf rings (the other four seem to have been destroyed by dragon fire).

Sauron later offered to give one to Dain II Ironfoot, King under the Mountain; as reward for helping find Baggins the Hobbit. 

But Sauron may have been lying. 

After all, the dwarf rings "didn't work" as Sauron intended. They failed to subordinate the dwarvish race to Sauron's will. 

Instead; the dwarf rings seemed to increase greed and covetousness (already archetypical dwarvish vices), while making it easier to accumulate treasure by trade. That is: If a ring-wearing dwarf traded in lead, he would become wealthy in lead; likewise for silver, gems, or gold. 

As the possessor of "the last of the seven" to be un-re-claimed by Sauron; Thorin's grandfather Thror, said to his son Thrain: the ring needed gold to "breed" gold. 

So, what did Sauron do with the three dwarf rings he re-possessed? 

I see three possible options:

1. Sauron kept and guarded the three dwarf rings, to ensure that nobody else could get hold of them; in particular so that no dwarf could become wealthy and powerful enough to threaten (or, at least, to interfere-with) Sauron's plans.   

2. Sauron intended to use the three remaining rings as bargaining chips to buy the cooperation of dwarves. 

This is implied by Gloin's account of Sauron's messenger offering to give Dain (King under the Mountain) one of the dwarf rings as a reward for helping to find Bilbo and the (One Ring) rings that he allegedly had "stolen". 

If Sauron's messenger was speaking the truth, then at least one of the remaining three rings was still available for this purpose. 

However, there is no reason to assume that Sauron's messenger was speaking the truth! It may have been that Sauron had zero intention of ever returning any ring. It may be that Sauron would have broken his promise...

Thus; if Dain had indeed cooperated with Sauron, and the hobbit ring-bearer had been found and the One Ring captured by Sauron; then it seems likely that Sauron would just have broken the "deal", and simply kept the dwarf ring.

3. A third possibility is that Sauron would be able to reclaim the power that he had invested in the three recovered dwarf rings, by means of destroying the three rings in some particular magical procedure.

This assumes that if Sauron knew how to put some of his innate power into a ring, he would also know how to get that power back again in process of destroying that ring. Presumably; because he had access to the hottest fires in Middle Earth in Mount Doom, what was technically possible to Sauron may not have been possible to anyone else.  

My best guess is that this third option was the most likely: i.e. that Sauron had, by the War of the Ring, already boosted his own power somewhat, by reclaiming much of what power he had put-into each of the three dwarf rings that Sauron had re-possessed. 

Note: The above information derives from The Lord of the Rings, especially Appendix A:III, and The History of Middle Earth Volume XII: The Peoples of Middle Earth.