- Tell me what you want done, and I will try it, if I have to walk from here to the East of East and fight the wild Were-worms in the Last Desert.
- Bilbo Baggins in The Hobbit 1: An Unexpected Party
Tolkien only ever mentions were-worms once, in the quote given above, so we know almost nothing about them. We cannot even be certain that they actually existed - the Hobbits had a rich folklore peopled with fantastic beings, and were-worms quite possibly fall into that category.
If they did exist, the name 'were-worm' suggests a shapeshifting creature like a werewolf - a being that could take the form of either a Man or of a Dragon. Any discussion of the form or habits of the were-worms, though, must remain in the realms of speculation.