"Thou shalt not pass!" the grey wizard (who would later become the white wizard) shouted defiantly. Standing over a bottomless chasm on a narrow bridge, he held his arms wide and placed himself between his retreating allies and a "Demon of Might". Darkness shrouded the man-shaped giant. Its eyes were burning coals, its nostrils breathed sulfurous flames, and a mane of fire tumbled down its muscular back. The presence of this demon was so great that the ancient ground quaked beneath its feet. It lashed out with its many-thronged whip of fire but still the wizard held his ground. None had ever faced the Balrog and lived. And so it was for the wizard. He made the ultimate sacrifice and, in doing so, saved the lives of his companions.
The epic battle between Gandalf the Grey and the Balrog is, in fact, the echo of an older conflict between Surtr, the lord of Muspelheim, and Freyr, a god of the sun and rain. Both battles begin with the blast of a horn – the horns of Boromir and Heimdall respectively. Gandalf's battle takes place on the bridge of Khazad-dûm while Freyr's takes place on the Bifrost which was the rainbow bridge connecting Asgard to Middle-Earth. Both battles end with the bridge collapsing and the combatants falling into an abyss. In the end, Gandalf dies but is born again. In the older tale, the flames of Surtr's sword engulf the earth. But a new world is born anew from the ashes, setting the stage for the surviving gods to meet again.
It is usually assumed that the Balrogs who inhabit the same Middle-Earth as Gandalf were born in the fires of the original dark enemy Morgoth. But when we read the accounts of Gandalf, and learn of the immense power of the Balrogs and the fear they inspired, we must consider the possibility that they are direct descendents of the ancient fire giants who destroyed the world at Ragnarök.