1. Axel is killed by nobodies.
2. DiZ is the one that tells EM (Xenmas) that Axel is a traitor.
3. EM thinks DiZ is helping to keep Sora & Roxas seperated, when in truth DiZ is trying to merge them with out actually doing it himself, it's a big plan.
4. Axel was "lured" there it seems, with info that Roxas was there. Axel doesn't want Roxas and Sora to merge because he doesn't want to lose his friend.
5. DiZ "helps" Roxas by pushing him on and helping him with the Key Blade (Him and Namine manipulate the data to give it to him) and help him beat Axel and fuse with Sora.
6. Since DiZ wants all Shells destroyed, he completes his plan by telling EM that Axel betrayed the Org and it's cause and let Roxas and Sora merge, basically killing one of their own members. Ofcourse the Org doesn't like this and labels Axel a traitor.
7. Axel "runs" to Sora and says he will help Sora against the upcoming battle. Axel fights against the Nobodies, letting Sora move on, but is eventually killed when he tires from battle.