I read the first book in the 90s. The characters are taken back in time and into other bodies. There is a man, woman and a dwarf at least. They use their modern knowledge to help rule. They make revolvers at the end and the main leader is killed.
After checking with the almighty wiki, I'm pretty sure you read part of the Guardians of the Flame series by Joel Rosenberg..
It's about a group of students playing a fantasy RPG that get transported into the game setting - and into their characters (one a dwarf) - by their gamemaster, who knew it was real and was looking for a way there himself. They end up staying put and starting a revolt against slavery, founding their own haven nation, and starting some modern tech (including gunpowder and eventually revolvers). Past the first book the fact that it was a game on Earth doesn't get mentioned much.
Per the wiki, one of the novel collections was titled Guardians of the Flame: The Heroes, and contained books 4 and 5 from the series. This is probably what you read.