The real happenings of this movie (in my opinion)

Rating: 10/10 (13 January 2005)

As the simplest answer is usually the correct answer, I give my theory for everyone to ponder.
The entire movie, including many days prior to it taking place, up the the point right after the engine hits (second hit) and kills him, takes place in dream as Donnie dies.
There was no missing aircraft, no girlfriend, no psychiatrist, no murders ,imaginary friends or time travel. This was all a figment of Donnie's imagination, a product of his brain losing oxygen while he died.
When Donnie is hit with the engine of the aircraft, he dies almost instantly. His mind struggles to comprehend as it runs out of energy.
The only part of the movie that may have existed outside of his mind was the just after the second crash as the family stand crying in the yard. As this point there is no mention of what happened other than an engine hitting the house, (no missing aircraft). there is only a scene of the engine being extracted.