As always, the classic, frustrating, yet accurate answer is....
It depends.
What does the rest of the army look like? What is his strategy?
At the risk of bringing down the wrath of Kiwi, the answer to how to beat Dwarfs with only 400 points of heroes is quite easy. Wood Elfs are great at shooting and maneuvering. Run those advantages into the ground. Use the trees, shoot...a lot...and get on Dwarf flanks. Stay out of cc.
As good as Dwarf shooting is, the massive hail of Wood Elf arrows, properly targeted, combined with their ability to move 5" per turn and still shoot without penalty, means they still have the missile advantage.
Again, however, this is in a vacuum, assuming your WE friend is not using an army with 4 units of Dryads, a unit of Wardancers, and some Eternal Guard or something like that. In that case, how do you beat the Dwarfs?
Hand him a cold adult beverage. Wait until he consumes it. Hand him another. Rinse, repeat, wait for him to fall over, then make outrageous claims about what occurred in the previous battle...how spectacularly all the cannons blew up first turn, the Dwarfs never made an armor save but the Wood Elfs made all their Ward Saves since the Dwarf player mysteriously did not have any magic weapons, and laugh all the way home. Broke, because Dwarf players can consume LOTS of cold adult beverages...but hey, you won
