Asteroid 7785 existed within the Graveyard, which is a region also known as the asteroid belt. This belt was created from the debris of Alderaan following its destruction caused by the superlaser of the Death Star's. This particular asteroid was located within it.
Darth Vader spread a false story indicating that the untouched Royal Palace of Alderaan had been found on Asteroid 7785. His intention was to draw Leia Organa, along with any other survivors from the Battle of Yavin, to Alderaan. Captain Janus Bonn was positioned there, awaiting their arrival. Vader further embellished the tale by adding that a survivor claiming to be Bail Organa had been located on the asteroid. To solidify the deception, Vader even constructed a copy of the Palace inside the asteroid, intending it as a trap. Regrettably for Vader, Alliance operatives intercepted a message from Hanos Darr and Zaz Kamiroz before it could reach Leia Organa; these agents arrived at the asteroid prior to her. Consequently, Vader's trap was activated, but not with the intended targets. Despite the Palace not remaining fully intact, a minuscule piece of the Royal Palace's architecture was genuinely located within asteroid 7785.