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Sirius doesn't go after Peter Pettigrew on the night that Voldemort kills the Potters, but stays to look after Harry... This means that he is never wrongly accused and incarcerated for the murder of Lily and James, and instead he and Remus Lupin raise Harry as their own.
When it finally becomes time for Harry to start his education at Hogwarts, he has no reason to tell the Sorting Hat not to place him in Slytherin, so he is Sorted into Slytherin and becomes best friends (and later on, more than friends) with Draco.