In this work we present a study on the influence of an in situ grown SiNx intermediate layer inside (Al)GaN epitaxial layers grown on SiC substrates on dislocation densities and material strain of the epitaxial films. A defect density of 6 x 10(8) cm(-2) was achieved by reducing the number of pure edge dislocations in the order of one magnitude. It was found that a reduction of the dislocation density is only successful by inserting the SiNx layer inside GaN films and no defect reduction takes place with SiNx inside AlGaN films. The presence of stacking faults at the close vicinity of the SiNx layer plays an important role for the mechanism of dislocation termination at the SiNx interface. To determine dislocation densities an etch pit density method was carried out combining transmission electron microscopy (TEM) investigations of plan-view samples with atomic force microscopy (AFM) scans. Structural properties were investigated by cross-sectional TEM samples. Composition of AlGaN at the SiNx interface was determined by energy dispersive X-ray analysis (EDX) and secondary ion mass spectroscopy (SIMS). Material strain was investigated by micro-photoluminescence measurements (mu-PL). (c) 2005 Elsevier B.V. All rights reserved.