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Lelouch was surprised that Nunnally was alive but he dismissed her coldly saying if she stand in his way he'll show no mercy then cut off their communication.
Nunnally knows about the Damocles and activation of FLEIA but didn't know that not only the whole Pendragon was wiped out, but the civilians living there as well.

Now the great battle started with the Black Knights supporting Schneizel. With the annihilation of Pendragon, Lelouch armies were the troops he brought with him when he took possession of Japan again.