If you breed a Dw dw rabbit to another Dw dw rabbit, each baby will have a 25% chance of having Dw Dw, a 50% chance of having Dw dw, and a 25% chance of having dw dw.

However, if you breed a dw dw to a Dw dw, the babies have a 50% chance of being Dw dw and a 50% chance of being dw dw, no peanuts. This is why many breeders use the oversize does for brood does.

There are several breeds of rabbits that have the (Dw dw) ->True Dwarfing gene.
The breeds that carry the Dwarf gene are -Dwarf Hotot, American Fuzzy Lop, Jersey Wooly, Holland Lop, Netherland Dwarf,Britannia Petite, Mini rex, and Polish, The Dwarfing gene controls the size of the rabbit.
A dwarf rabbit is genetically Dw dw. The Dw makes a rabbit normal sized, and dw makes it a dwarf rabbit. In order for a rabbit to be a True dwarf it HAS to have both genes. when you breed two dwarfs together you'll have 1/4 chance of getting peanuts that are genetically Dw.

When the dwarfing gene-> ( Dw Dw ) is inherited from both parents it is a lethal gene,
Rabbits carrying a double dwarfing gene are called peanuts.

These small tiny kits have the Dw Dw-- (double dwarf genes), and normally do not live past 3 weeks. you can recognize a peanut by their tiny size, and ears which are set back on their head, and their inablility to gain weight and Thrive.

Normal 2 day old kit ---------- Peanut 2 days old
( Litter Mates )

The same 2 day old kits side by side
Left-Peanut ---- Right- Normal

Picture of Peanut that Lived 4 weeks

Within dwarf breeds there are False-dwarfs.

There will be about 1/4 chance of getting False-dwarfs that are genetically dw dw. These will be larger, go over the breed weight limit and have bigger heads and longer sized ears. Many of the False-dwarf does are used in breeding programs because they most times will have nice body type and produce Large Litters with no peanuts in their litters. When breeding a False-dwarf( dw dw ) to a True dwarf( Dw dw ), most times you get 1/2 True dwarfs and 1/2 False-dwarfs.
Examples of True & False Dwarfs
There is no way of predicting how many babies in each litter will receive the double dwarfing gene. There have been times does have had 2 or 3, and next litter they may have none at all. Unfortunately, all peanuts don't all die at birth. Some linger on for a few days until they starve or you put them down.