Diggers: The Second Book of the Nomes by Terry Pratchett
This is the story of Jekub, the Dragon in the Hill with great big teeth and a great loud voice. (Well, that's according to the nomes, but they are only four inches tall.) When humans threaten their new home in the quarry, the natural thing would be to run and hide. But the nomes have got the wild idea that they should fight back. After all, everyone knows that nomes are faster and smarter than humans, and now they have a secret weapon . . . The fantastically funny second book of the nomes, from the author of the bestselling Discworld series.