Durin's Bane is only seen as a light that chases the player(s) through Moria. When they reach the Bridge of Khazad-dûm, he appears in a cutscene where Gandalf destroys the bridge and the Balrog pulls him down.
The ultimate fate of Durin's Bane is not known, as only its physical form died, as with all Maiar when they were "killed," but what happened to the spirit of the Balrog was not revealed.
The Balrog killed Durin VI, the Dwarf-King of Khazad-dûm, whereafter it was called Durin's Bane by the Dwarves. Avarice, principally for mithril, drove the dwarves to go too deep and awaken the Balrog.
The only recorded instances of Balrogs having been slain are Gandalf's slay of Durin's Bane, Echtelion's slay of Gothmog and Glorfindel's slay of an unnamed Balrog.
While the colony was initially successful, Orcs and Durin's Bane, the Balrog, attacked them five years later, killing all of the Dwarves. However, Gimli did not know about the Dwarves' fate in The Lord of the Rings: The Fellowship of the Ring.
Middle-earth Mysteries - Was Durin's Bane the last Balrog?
Is Gimli the last Dwarf?
Though Gimli has no children, he is not the last Dwarf of Middle-earth. After the fall of Sauron, his people continued to thrive in the Lonely Mountain. Gimli made his home in Rohan, in the Glittering Caves of Aglarond, and many of his kinsfolk came with him.
For more than five millennia, the Balrog hibernated in his deep hiding place at the roots of the mountains in Khazad-dûm. He remained undisturbed throughout the Second Age and most of the Third, before the mithril-miners of dwarf-King Durin VI awoke him in T.A. 1980.
Thus, Galadriel's dark form in Jackson's The Lord of the Rings personified what would have occurred had the Lady of Lothlorien given in to temptation and taken the One Ring for herself. She would have succumbed to evil because the Ring was indomitable, even with her power.
Secondly, Balrogs were the epitome of malice and power while Sauron only ever won one of three fights he ever had. Sauron was the great deceiver. His power lies in planning, subterfuge, manipulation, and corruption. Strength wasn't his game.
6 Gandalf. As previously stated, Gandalf is a Maia and is therefore superior to Elves regarding power. Still, this isn't to say that an elf couldn't develop enough skill and power to defeat a Maia. As a bearer of one of the Three Elven Rings (Nenya), Galadriel would have an edge against Maiar like Saruman and Radagast.
The fear of Elves is more spiritual, so the demonic creatures of shadow and flame are unsurprisingly horrifying to them. Legolas doesn't appear to have any hesitation in his actions throughout the films, but it's clear that his blood runs cold when a Balrog appears in the Mines of Moria.
So, when Gandalf agreed with Frodo's decision to travel through Moria, he knew that something could be hiding there. Yet, he had no reason to think that it would be something as awful and powerful as a Balrog. Only King Dain Ironfoot knew that Durin's Bane was a Balrog.
Their deaths and Thorin's did not end Durin's line, although did end the branch which had Thror, Thrain, and Thorin Oakenshield. Thorin's cousin, Dain Ironfoot, became King after Thorin's death. Dain's son, Thorin Stonehelm, became King after Dain died in the Battle of Dale. The line continued on after that.
She also resisted being offered the ring of power by Frodo following his vision in the mirror of Galadriel, an immense test given the ring's seductive powers. Yet Gandalf's power level exceeds even that of Galadriel, as shown by his rebirth in the Two Towers.
Galadriel's possession of the ring would have made her a powerful evil force, as her desire to be adored would corrupt her. Despite her power, Galadriel couldn't match Sauron's ability to wield the One Ring, and it would have ultimately turned against her.
The majority of her powers come from her Ring of Power, Nenya, the Ring of Water. The ring, also known by the names the White Ring and the Ring of Adamant, is one of the three Rings of Power given to the Elves of Middle-earth in the Second Age.
Melkor is the most powerful of the Valar but he turns to darkness and is renamed Morgoth, the primary antagonist of Arda. All evil in the world of Middle-earth ultimately stems from him. One of the Maiar of Aulë betrays his kind and becomes Morgoth's principal lieutenant and successor, Sauron.
It was said that Morgoth hated and feared the House of Fingolfin most among the Houses of the sons of Finwë, especially Fingolfin's son Turgon, as it was prophesied that his doom would come from the House of Turgon.
In all of Tolkien's text I've read, there are three people who have killed a Balrog. Ecthellion, Glorfindel and of course Gandalf. All of these fights ended in a draw with all three sacrificing their lives for the deed.
Aragorn rushes in and chops off his arm, before Gimli strikes Gothmog from behind in the torso with his axe, and Aragorn then delivers the final blow to his back, killing him.
But I think you answered your own question. Gandalf doesn't know what it is until he sees it out in the open, as Legolas does as well. He recognized what it is as well as the elf, by sight, but is unable to recognize it just by confronting its power with his own.
