The Keyblade Graveyard is a world which appears in Kingdom Hearts II: Final Mix and Kingdom Hearts Birth by Sleep. It was first revealed in Kingdom Hearts IIs secret ending, "The Gathering". Before its formal introduction as a world, the Keyblade Graveyard is known as "'The Badlands" (謎の荒野, Nazo no Areno, lit. "The Mysterious Wasteland").
Kingdom Hearts Birth by Sleep
The Keyblade Graveyard is shown numerous times throughout the game as a rather enigmatic place for random battles at first. The world first appears when Ventus sees Vanitas floating through space, and follows him to question him on his earlier comment of Terra no longer being Terra. Ven once again visits the Keyblade Graveyard when he discovers that his friend and companion, King Mickey Mouse, has been abducted to the Keyblade Graveyard by Master Xehanort as to lure him into a trap. Later on, Vanitas appears before Ventus on Destiny Islands and reveals that he is the embodiment of the darkness inside Ventus's heart, and was created by Master Xehanort in the Keyblade Graveyard. At the game's climax, through the manipulations of Master Xehanort, Terra, Aqua and Ventus each end up at the Keyblade Graveyard and meet up. Master Xehanort appears alongside Vanitas, and explains to them that this was the place were a great battle took place, the Keyblade War, also revealing his intentions to use the X-blade to unlock Kingdom Hearts and unleash the forbidden secrets of the Keyblade War upon the worlds. An epic battle ensues, and after Master Xehanort freezes Ventus and drops him off a cliff, and Vanitas knocks Aqua unconscious, Terra uses the darkness in his heart to fight Master Xehanort.
Terra defeats him, but this allows Master Xehanort to take over Terra's body, thus creating Xehanort. However, Terra's soul finds its way into his discarded armor, creating the Lingering Will. The two fight, eventually ending with the Lingering Will winning by knocking out Xehanort. Meanwhile, Aqua fights Braig to defend a frozen Ventus. After Braig escapes, she is knocked out by Vanitas. Before he can finish her off, Ventus thaws out and fights him. Afterwards, Vanitas shows his true face, identical to Sora's, and forces Ventus to absorb him and both are transported to the Awakening where they have their last battle while Aqua and Mickey are forced to fight Ventus, possessed by Vanitas. Vanitas is defeated in both fights and fades out of existence, and the χ-blade is destroyed, resulting with Ventus losing his completed heart. A huge blast (created by the shattered χ-blade) transports Xehanort to another world and Aqua and Ventus's bodies into the Lanes Between, where they are found and rescued by Mickey. The Lingering Will kneels down, and swears to Aqua and Ven that one day, he will end this conflict.
Kingdom Hearts II Final Mix
In Disney Castle, a portal to the Keyblade Graveyard appears in the Hall of the Cornerstone. Chip and Dale summon Sora, Donald, and Goofy, who enter the portal and find the Lingering Will alone in the Keyblade Graveyard. The Lingering Will first wonders if Sora is Aqua, Ventus, Riku or even Xehanort. Calling out Xehanort's name, the Lingering Will engages Sora in a fierce battle. Sora manages to defeat the Lingering Will, who respectfully acknowledges Sora as a true Keyblade Master and then returns to his normal position. If Sora comes back to challenge him again, the Lingering Will agrees to fight, but states to Sora that he has nothing left to give him save for his hatred for Xehanort.