INITEX is a slightly modified version of tex suitable for creating format definitions; as such, it starts with a very blank slate. Its starting state is described in the TeXbook, p.39:
There's a program called INITEX that is used to install TeX, starting from scratch; INITEX is like TeX except that it can do even more things....INITEX needs extra space to carry out such tasks [hyphenation tables, formats], so it generally has less memory available for typesetting....
When INITEX begins, it knows nothing but TeX's primitives. All 256 characters are initially of category 12, except that <return> has category 5, <space> has category 10, <null> has category 9, <delete> has category 15, the 52 letters A...Z and a...z have category 11, % and \ have the respective categories 14 and 0.
So the answer to your question is that these definitions are made in the TeX source code; I do not have TeX: the program at hand right now, so I can't give you a line number.
These days, there is may be no actual program called initex on your computer; instead, as the TeX FAQ explains, it is incorporated into tex itself via command-line options.
luatex --ini, because I don't need all the extra plain macros :) – dıʞsdoʇ Mar 2 '12 at 17:48:-)Does that mean you only use the primitives? – morbusg Mar 2 '12 at 17:50