Kallen is released and joins the battle. She fights Suzaku, and beats him.
This would be his end, but he's been geassed to live.
And they've installed an annihilation bomb on the Lancelot. It he discharges it over Tokyo, he will survive.
Nunnaly is vaporized in the blast.
Schneizel cones on a diplomatic mission to the black knights.
While Lelouch has a breakdown, he tells the Knights about Zero's identity, and about geass. He has a dossier of people who have been geassed.
The Knights feel betrayed. They agree to trade Zero for Japan.