My theory on the whole matter is that the Dassey boys and their step-father Scott had conversations with Steve about Teresa, who Steve had been trying to get to come to the property for a long time. After Steve's interaction with Teresa, and her taking pictures of the van that was being sold, she either ran into Scott who had apparently just returned from a hunting trip or Bobby who was apparently on his way out for a hunting trip as she was leaving the property. Teresa, who was already freaked out by her inevitably uncomfortable meeting with Steven, said or did something that Scott (who has a convincingly relevant history of violent crimes) or Bobby took offense to. One of them incapacitated her and threw her in the back of her RAV4 (where the blood patterns indicate bloody hair was laid). One then gets the other involved if he wasn't already and the two of them drive to a secluded area (the quarry a few miles outside of the Avery property where bones were found) one in the RAV4 and the other in another vehicle. There she was shot (both "going hunting" around that time indicates them having their guns with them) before her body is then burned. They then abandon the body in the quarry and the RAV4. Their alibi for that time period is held up solely by each other's testimony and is directly refuted by the bus driver that dropped Brendan off AFTER Teresa's meeting with Steve took place. Bobby even asserts that Scott will know precisely what time they saw each other "passing one another on the highway", but neither provide any way to prove their alibis.
This is where shit gets weird. I think the police find the RAV4, either at the quarry or elsewhere. They run the plates, figure out that it belongs to missing person Teresa Halbach, investigate briefly and discover a burned body in the quarry. This happens a few days before the search party that "found" the RAV4 in the Avery yard as supported by Andrew Colburn's testimony that the plates were run before the vehicle was officially "found". During this time there is a large investigation going on at the Avery residence where nothing has been found connecting him to the crime while Avery is away at a family member's home. Colburn who has found the vehicle and the body then gets others within the Manitowac PD involved who are just SURE that Steven Avery did this, so they make sure that what they find matches their guy in a way that makes sure this case will be open/shut. Lenk, who knows that Avery's blood is on file in evidence obtains some and then either plants it himself or has Colburn plant it on the vehicle. They then move the vehicle to the Avery residence, probably in the middle of the night, and place it where it appears to be "hidden", but in reality can still very easily be found. They also obtain a burn barrel from the property, return to the quarry where they attempt to transport ALL of Teresa's remains (but only collect MOST of them) to the fire pit where they KNOW Avery had a fire the night of Teresa's disappearance (one that they also know he originally tried to deny having) and bury them in with the rest of the burnt materials. Then they wait. It's inevitable that someone eventually find the vehicle (but they know it can't be them) and that once they do they can run tests on the blood (which they know is Steven Avery's), they can search the burn pit and find the body 30 yards from where the main suspect sleeps and wham, bam, thank you ma'am it's case closed. They were not suspecting however that it wouldn't be so cut and dry and that they would have to plant further evidence down the road as they either found or created it in order to make the whole thing stick.
See... The Manitowac PD didn't "frame" Steven Avery, they simply made sure that THIS TIME there was no doubt that he did the crime, much like they tried to do the first go around. After all, most of them firmly believed that even though DNA evidence exonerated him from the crime he spent 18 years in jail for, he was still guilty of it. Whether that be a misunderstanding of DNA evidence, a willful ignorance to the other circumstantial evidence, or any other number of reasons... they simply believe that a violent felon that they simply did not like was released from prison unjustly and they were going to correct that mistake.