Interactions between interior substitutional nitrogen defects and surface unsaturated dangling bonds in synthetic nanodiamonds of ∼25 nm size were explored experimentally and theoretically. The experimental results demonstrate the disappearance of the specific paramagnetism of nitrogen centers in the smallest nanoparticles isolated after processing large micron diamonds in a ball mill, accompanied by the formation of unsaturated surface dangling bonds and internal defects. First principles modelling confirms the vanishing of the magnetic moments related with nitrogen centers even for distances from the surface defects greater than 1 nm. To understand this effect, we consider a bond reconstruction scheme with the formation of several carbon-carbon double bonds in the area between the interior and surface point defects. The scheme is in agreement with the changes in electron density through the distance between the two defects. The developed approach can be used to describe the interactions between various defects in carbon-based systems.