That's the Tribunal's version...
And it doesn't even make sense. If you were Neravar would you let Dagoth guard the heart and tools if he was allied with the Dwemer?
But it's been a while since I played the Morrowind Main-Quest so I could be mistaken but if I remember correctly then it went like this:
They defeated the Nords,Orcs and Dwemer at Red Mountain and Neravar left to tools with Dagoth while he went and consulted Seht,Vehk and Ayem. Dagoth gave in to temptation and used to tools and opon discovering this Neravar struck him down and thought he was dead.
Vehk then murdered Neravar and used the tools along with the other Tribunal.
If Dagoth was working with the Dwemer he would not have been able to use the tools on the heart. I doubt Neravar, being as smart as he was, would have allowed an enemy to get close to something so powerfull and mystical.