"There are fifteen Valar. They tell us they created the world, and we have no particular reason to disbelieve them. They did not create us - they say that Eru did that. I believe that it was a power beyond them, whatever we want to call it, because Melkor has set himself ever since the beginning of Creation to trying to cause as many horrors in it as possible and if people were the sort of thing he had the power to create, he would have done so. He didn't. Instead, he found early Elven settlements on Endorë, kidnapped Elves, and tried to breed his own race of monsters. He succeeded, eventually. Elven bodies take a form decided by our minds, at least in part, and if you torture an Elf child from the minute, in the womb, when they begin to feel the world around them, you can create a twisted race of peoples with some, but not all, of the abilities of Elves. They are called orcs. They are in pain all the time; they have to be; that's what makes them orcs. Melkor changed other things about them, too: he made them grow to adulthood quickly, he made them desperate to have as many children as possible, and he makes them all, in early childhood, bindingly swear him eternal loyalty. On Endorë we war with Melkor and with our own great-great-grandchildren, raised in pain to be monstrous slaves. Melkor does not need them. When it comes to it, he fights us just as effectively without them. War is more than a game of numbers when you are a god. They exist just because it is terrible that they exist.
I do not think Melkor knows of the existence of other species. I expect that he would be delighted.
Elves, as we've mentioned, keep backups of our brains on the computers in our heads. If Melkor captures an Elf alive, or not dead enough, he takes those chips and creates a virtual environment in which he can torture the Elf. He is very creative, and he has arbitrary control over that environment, and he runs thousands of copies, and he has millions of prisoners, and he runs them very quickly. Years per second, maybe decades, several centuries while we've had this conversation.
That part he probably could not do to other peoples, not by any means I know of.
Most of the surface of his territory is full of computer farms, enabling this pastime of his."