Here, we present a comprehensive study analyzing early stages of the transformation of detonation nanodiamond (ND) powder to graphitic carbon onions via thermal annealing in argon atmosphere. Raman spectroscopy was employed to monitor this transformation, starting with the sp³-to-sp² conversion of the ND surface at the onset of the graphitization process. Additionally, transmission electron microscopy, x-ray diffraction, and thermogravimetric analysis were used to supplement the structural information obtained from Raman spectroscopy and allow for an accurate interpretation of the obtained Raman data. The effect of the annealing time on the transformation process was also studied to determine the kinetics of the conversion at low temperatures. The results presented in this study complement previous work on ND annealing and provide deeper insight into the nanodiamond-to-carbon onion conversion mechanism, in particular the time and size dependence. We present further evidence for the existence of a disordered sp² phase as an intermediate step in the transformation process.