The Unknown Zone is a pocket Zone adjacent to Mobius, and the home of Verti-Cal and Horizont-Al. It is a strange realm where the normal laws of reality don't seem to apply, which is perfectly in keeping with Al and Cal's reality bending powers.
Sonic the Hedgehog first entered the Unknown Zone after approaching a strange grouping of Power Rings and being sent into it by a hidden spring. It was here that he met Al and Cal, and he eventually escaped after enduring the strange properties of the zone and being returned to the Great Forest. Al and Cal later briefly left the zone in order to help Sonic and the other Knothole Freedom Fighters escape from a virtual reality created by Dr. Robotnik. (StH: #2, #16)
Unfortunately, the Unknown Zone was one of the many areas affected by the Ultimate Annihilator. The energy wave broke the zone down into its basic elements, though Al and Cal managed to restore it after somewhat recovering. Unfortunately, the effects of the energy and their near destruction drastically changed Al and Cal, who became mechanical beings who blamed each other for the incident. As such, the Unknown Zone became a battleground as they fought each other for dominance. Sonic and his friend Tails were drawn into the conflict as well, with Al and Cal each taking one of them as a brainwashed champion. Fortunately, the two managed to overcome these effects, though Al and Cal continued to battle in the Unknown Zone. (StH: #59)
After some time, the damage spread beyond the Unknown Zone to other zones, forcing the Zone Cops to intervene. They arrested Al and Cal and transported them to the Zone Jail in the No Zone, presumably leaving the Unknown Zone deserted. (SU: #29)