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This alternate timeline was created by the Black Guardian for revenge on the Doctor. In this timeline, the First Doctor never left Gallifrey, and was now Lord President. However, it also meant that countless aliens had invaded Earth, and were now battling over it. The Seventh Doctor arrived within the chaos, and was instructed by the White Guardian that to destroy this timeline, he had to once more retrieve the Key to Time.
The Doctor, Ace, and Benny were able to retrieve the Key to Time and defeat the Black Guardian and was able to destroy the timeline. Back on Gallifrey, the First Doctor and Susan decided to steal a TARDIS and leave in order to protect the Hand of Omega. (DWM: Time & Time Again)