i know little to nothing on this matter; this is what i was able to find:
In the same source, Tolkien added that "Smaug, the Dragon's name, is a representation in similar terms, in this case of a more Scandinavian character, of the Dale name Trâgu, which was probably related to the trah- stem in the Mark and Shire". Thus, the made-up names Sméagol (pseudo-Old English) and Smaug (pseudo-Scandinavian) involve the same original stem, representing the relationship between the actual Middle-earth names Trahald and Trâgu. Since Trahald is said to mean "burrowing, worming in" or "apt to creep into a hole", it is interesting to notice that Tolkien stated that the name Smaug (representing Trâgu) is "the past tense of the primitive Germanic verb Smugan, to squeeze through a hole" (Letters:31).
Basically, that says that "Smaug" is a representation of the dragon's name in the tongue of Dale, which would be Trâgu. That's all I found.