In 1523, Ibrahim Lodi, Daulat Khan's sovereign, was locked in a power struggle with his relatives and minister. Daulat Khan was one of Ibrahim's chief opponents, along with the ruler's own uncle, Alam Khan (also known as Ala-ud-din), who at that time was living under the protection of Sultan Muzaffar of Gujarat. There was rebellion throughout the empire. Aware of his own precarious position, Daulat Khan sent his son, Ghazi Khan Lodi, to Delhi to learn more about the state of affairs in the government. On his return, Ghazi Khan warned his father that Ibrahim Lodi was planning to remove his governorship. In response, Daulat Khan sent messengers to Babur in Kabul, offering his allegiance in exchange for assistance against the emperor. Babur agreed.
Babur's army quickly captured Lahore and Dipalpur. Daulat Khan and his sons, Ghazi and Dilawar Khan Lodi, joined Babur at Dipalpur only to be disappointed when Babur presented Daulat with Jullundur and Sultanpur instead of Lahore. Rather than accepting these assignments, Daulat Khan and Ghazi went into hiding while Dilawar Khan betrayed his father and accepted Sultanpur and the title of Khan Khanan.
Daulat Khan eventually emerged a short while later, when Babur left India to fight the Uzbeks at Balkh while leaving some forces in Lahore to assist Alam Khan lay siege to Delhi. Daulat offered his assistance to Alam Khan, hoping to recover Lahore. However, since he was no longer on friendly terms with Babur, Daulat Khan's assistance was declined. Instead, he was left in charge of Punjab with his son Ghazi, while his other sons, Dilawar and Hajji, went to Delhi with Alam Khan. This attack was unsuccessful due to treachery on both sides.
Babur heard of Alam Khan's failure in Sialkot, on his way back to India. Meanwhile, Daulat Khan and Ghazi, hearing of Babur's return, fled to the fortress of Milwat, to the north of Lahore. Babur laid siege to Milwat and Daulat Khan surrendered. He died on the way to Bhera, where he was to have been imprisoned.
The events that Daulat Khan had started in motion by inviting Babur to India finally culminated in the battle of Panipat in 1526, where Ibrahim Khan Lodi lost his life. Babur was now ruler of India, going on to found the Mughal Empire.
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