Durin's Bane was one of the Balrogs who survived the destruction of Angband, when the Valar waged war with Morgoth, at the end of the First Age.

Durin's Bane fled, and apparently hid itself away deep within the roots of the Misty Mountains, under what would become the great Dwarf city of Khazad-dûm.

Durin's Bane hid there for nearly 5,000 years, until the time of King Durin IV, when the dwarf miners of mithril delved too deeply, and awoke the Balrog from its 'sleep'.

Durin IV was slain by Durin's Bane, and also his son Náin I when he became king and tried to defend their halls against the Balrog.

Eventually the dwarves abandoned their mansions of Khazad-dûm and fled, leaving, what was thereafter called Moria, home to Durin's Bane alone.

When Sauron began readying for the War of the Ring, he sent some of his servants to populate Moria and, interestingly, they went unbothered by the Balrog. If this was because Durin's Bane was following orders from Sauron, we cannot know for certain, but it would certainly seem that way.

During TA3019, the Fellowship entered Moria on their way to Mount Doom and there, upon the Bridge of Khazad-dûm, Gandalf faced Durin's Bane.

The Wizard broke the bridge, but as the Balrog fell into the deep, it's firey whip flashed out and pulled Gandalf along with it.

Together they fell, and for eight days, Gandalf chased Durin's Bane through the deepest, darkest caverns beneath Moria.

At last they came to the Endless Stair that climbed to the very top of the peak of Zirakzigil, and there Gandalf finally defeated Durin's Bane. For two days and nights they fought, until the Balrog was cast down from the mountaintop, and was vanquished.
Encyclopedia entry originally written by Nienna-of-the-Valar