Alfred is apparently killed while rescuing Batman and Robin.
One day while cleaning the Batcave while Batman and Robin are away, Alfred overhears a recorded message on the Batphone by Commissioner Gordon that the Tri-State Gang is in Gotham City. Knowing that Paul Pardee is the possible leader of the gang, Alfred decides to go out and do some investigation for Batman so that they have more leads upon the caped crusaders return.
However, Alfred gets himself captured by the Tri-State Gang, and when Batman and Robin return to the Batcave they find Alfred's notes and go looking for him. Finding the Tri-States hide out they manage to get inside only to be gassed by a chemical that paralyzes. They're then put on a mock police line up where the crooks "finger" Batman and Robin for stopping them on previous criminal ventures, and they are "sentenced" to be executed.
Batman, Robin, and Alfred manage to escape from their cells, although when they go to save each other, each things the other to already have been executed, and goes after the Tri-State Gang to get revenge. Batman and Robin drive to Colonial City to stop the gangs next heist, and are about to have a bunch of rocks dropped on them by a construction vehicle, however Alfred (arriving on a motorcycle) pushes them out of the way and the rocks fall on him instead.
Batman and Robin then round up the crooks, and later when they return home and resume their civilian guises they are visited by Dick's Aunt Harriette who has arrived to look after Bruce and Dick after hearing that Alfred was killed in a tragic accident. The caped crusaders now begin to wonder how they'll be able to maintain their secret identities with Aunt Harriet hanging around.