OK.
In Fact ALL the rings were made by the Elves at first. When Sauron Forged the one, the elves precieved his plans and took of their rings. After this Sauron Siezed the seven and the nine and distributed them among the Men and Dwarves.
The Dwarves used the rings to gain treasure and gems, And they desired these above all other things. Making it impossible for sauron to corrupt them and controll them directly as wraiths. It is said that at the base of each of the seven hoses of the great Dwarves, there is a golden ring.
There was still the Three. After the war of the last alliance, When it was prcieved that Sauron was defeated, The Elves again felt it safe to use their rings as a way to preserve some of the ancient world in Middle Earth. This is what Elrond and Galadrial were doing in Rivendell and Lothlorien. The third Elven ring was held by Cirdan the shipwright at the Grey Havens. When the Wizards came across the sea, Cirdan, knowing why they were there, gave his Ring to Mithrandir (Gandalf) Who was the second to arrive.
If the 1 is destroied, All the rings were loose their power and all that was done with them would fall into disrepair. THIS is why Elrond said that his people were leaving and why Galadrial said that she would diminish and go into the West. For the elves, They are screwed either way, If Sauron gets the Ring, Middle Earth would be enslaved, If The ring is destroied, Their last homes will decay.
Hope that clears it up