Threading dislocations (TDs) can be reduced by in-situ deposition of intermediate SiNx sub-monolayers in group III-nitride heterostructures and their ternary alloys. Here we observe efficient dislocation density decreasing at the SiNx nano-mask in an AlxGa1-xN layer with x=0.2 grown epitaxially on c-plane sapphire by low pressure MOVPE. However we did not achieve high annihilation efficiency homogenously along the whole SiNx interface in our samples. Areas with high and low annihilation grade alternate along the interface in accordance with respective variations in the SIN, distribution. Furthermore an unusual dislocation bundling was observed for the dislocations in areas with high dislocation densities above the SiNx interface, leading to large areas of several mu m(2) with low dislocation densities at the surface between the dislocation bundles. By using growth interrupted samples under same growth conditions, it was possible to investigate the heterostructures in different growth stages by cross-sectional TEM. This enabled us to correlate the dislocation propagation with growth mode variations in AlGaN deposited on the SiNx interlayer and to develop a growth model for the AlGaN layer grown on the SiNx nano-mask. (C) 2011 Elsevier B.V. All rights reserved.