It doesn't happen very often. but they certainly can during courtship and aggression displays.
Dwarfs are unlikely to puff from fright though, which may be why photos of them are rare.
I've seen a couple on another forum (which of course I cannot post here) and you can certainly see how they got the common name 'pea puffer'!
And of course, it goes without saying (but I shall anyway), no account should you EVER try to get your fish to inflate.