vds is not something which we can set. you can only set vgs.Due to channel length modulation, the mosfet instead of having infinite output impedance , will have a finite output impedence.
in saturation vds has no control on the output current ,but if we r taking channel length modultion in account then output current depends on Vds.
in saturations region Rout in infinity,but in case of channel modulation it will have some value.so, in this case if we start increasing the vds, rout current will start decreasing.thus the current start increasing and it may reach a breakdown called avalanche breakdown.