When Frodo set out from Rivendell with the Fellowship, they at first planned to travel over the Misty Mountains. When they were stopped by snow on Mt. Caradras (sp?), they found themselves pursued by wolves and orcs, and fled into Moria, so as to go under the mountains. There they found Balin's journal and learned that he too had fallen prey to Durin's Bane. They were then set upon by a host of trolls, orcs, and something else. As they fled, the nameless evil was revealed to be a Balrog. Gandalf fought the Balrog on a narrow bridge and succeeded in destroying a section of bridge to make the Balrog fall. As it fell, the Balrog snagged Gandalf's lag with its whip and pulled him after it, sending them both plunging into a deep abyss. The rest of the Fellowship wept at the loss of Gandalf, but managed to escape Moria and reach Lothlorien unharmed.
Compare: Mordor