1035 exchange. Does it apply to 401k death distribution rollover into an estate account. ? Can I defer income tax.

Doubt the 401K distribution would qualify for that : 

A Section 1035 Exchange refers to the replacement of an annuity or life insurance policy for a new one without incurring any tax consequence for the exchange. ... replacing one life insurance policy for another life insurance policy, endowment policy or annuity contract.

And to specifically answer your question, no, a 1035 exchange does not apply to distributions from a 401(k).  Once a distribution is made from the 401(k) to an estate account, presumably because the deceased was not married and there was no designated beneficiary of the 401(k) (or the deceased explicitly listed the estate as beneficiary), the distribution cannot be moved to any type of retirement account.

One company advertises in the Web that 401K can roll over into annuity. Saying an insurance company creates an IRA annuity to receive the transfer. It is a non taxable event.

A 401(k) rollover into a Traditional IRA is a non-taxable event.

That is simply a rollover into a Traditional IRA and then the IRA purchases an annuity within the IRA.     You can do that with any Traditional IRA no matter how the money got into the IRA.   You might want to research that and get financial advice since many experts believe an annuity within an IRA is a very bad investment.

Thanks for all your responses !

Only an designated beneficiary roll a a 401(k) to an inherited IRA.  Only an individual can be a designated beneficiary, so if the distribution is payable to the estate, no rollover to an inherited IRA is permitted.

Presumably the deceased was not married, otherwise the default beneficiary would normally have been the spouse of the deceased.  Assuming that's the case, there is no avoiding this being a taxable distribution, no way to continue to defer taxes on this money.