Movie EXPLAINED - without any outside knowledge, and it fits quite well.
* * S P O I L E R A L E R T * *
I have not read the movie websites nor listens to the comments from the Director or even seen the director’s cut. I have read many attempts to explain the plot but I fell they fail as one cannot come to those conclusions without digging deep in to the background material or knowing something the movie does not tell. I have however watched the movie many times and I think I have an interpretation that can explain everything based on the movie alone, and everything fits pretty well.
The premise:
The universe is as we know it; it is ruled by cause and causality and we all play our parts in the schemes of everything. Cause and effect equals balance. But sometimes an anomaly happens that should not have happened. In the movie this is the falling engine from a future not yet written - it is an effect without a cause. When these anomalies happen the universe will try and fix it. The universe will try to create or establish the missing cause - whatever it may be. Whether it is the mechanics of the universe, God, other advanced beings, time travellers or whatever matters not. Personally, I like to think of it as Destiny and I will use this reference hence forth. Destiny is the player and we are the pawns.
The point is really to grasp that we are not seeing a bunch of strange and inexplicable and random events taking place. We see a careful mastered game of manipulation played by Destiny. Nothing is by chance, and all for the cold calculative purpose of creating a cause in a yet unwritten future.
The Anomaly
When the plane engine from an unwritten future falls through the present sky
The Plan to fix the anomaly
Something *beep* up, it is unexplained and we just have to take it as $hit happens. All we need to understand is that when it happens Destiny has to fix it somehow to keep balance. So, to make sense of this event Destiny has to make sure that the future (which has not yet happened) will cause an engine to fall off a plane and hit a wormhole to the past. In a world where everything is relative, the engine falling from the future re-establishes order to the universe. If there is no future where this engine falls, there is no sense to the present and this will destroy the universe as we know it. Destiny simply has to make sure the universe makes sense.
The Strategy to fix the anomaly
Grant powers to someone, who will eventually help in making the future event happen in such a way so there will be order in the universe once again.
The Tactics are like this:
1: Choose One, who is emotionally connected with the event
2: The chosen one must learn the truth about the universe, so he will use his powers when needed
3: Grant powers to the Chosen one, so he can fix when fixing needs to be done
4: The chosen one must be manipulated strongly to do what Destiny wants and thus be emotionally pushed to the limit.
By 1, Donnie fits the bill, thus Destiny wakes him up and saves him before the crash. We have a connection.
By 2, The Ms Sparrow story, the watery spears out of the chests makes him understand all is predetermined by Destiny and thus his own importance later on, and also that there is no need to resist. He learn he has a role, as he says “it cannot be a coincidence”.
By 3, Understanding Smurfs and their existential contradiction (power of insight). Seeing the watery spears out of the chests (power of foresight), making him realize he sees a wormhole forming in the end of the movie (power of knowledge), and his power to make or envision the engine ripping off the plane (power of... hmmm, let’s call it “power of playing his part in the universe”; at this point he sees this as his ultimate purpose)
By 4, All the little and strange events around him, and of course Frank is this manipulation happening. E.g. Ms Karen Pomeroy is manipulated to be the catalyst of the connection between Donnie and Gretchen, and also the catalyst to the Cellar Door etc. The School Principal firing Ms Pomeroy is everything but fair but again it makes her a catalyst to the Cellar Door reference. Each of these strange encounters serves a purpose in the scheme of manipulation by Destiny; Destiny is playing the game.
Donnie must fall in love and must fell fear. The strongest of human's emotions, as the movie teaches us.
By flooding the school he meets his love, which was ignited by Ms. Pomeroy earlier.
By burning the house, his mother has to leave them home alone so they can have a party where he and Gretchen will make love and strengthen the bond between them
By getting connected to Ms. Sparrow he learns about the universe, and he gets to the Cellar Door where his love will be snatched from him (the two emotions are now joined; his love and fear of dying alone).
By showing Frank as the messenger, he reacts strongly when he sees the real Frank as the killer. Who is only there because of the party. And all this pushes him to the limit, where Destiny needs him to be. Now and only now does he understand his powers of insight, foresight, knowledge and his ultimate part in the universe!
One open question is why his mother and sister are on the plane. I think this is connected to his power of insight and foresight. His whole world is destroyed, he felt love and he lost love. The two most important emotions to the human spirit. When he sees the wormhole forming (Destiny or the univerce is doing this) and he see a plane in the sky, then he visions his mother and sister on the plane, and it connects everything for him, he then understands that he simply has to break the engine off to safe everybody he loves (power of will or power of playing his part in the universe) .
Now back in the present he is laughing hysterically in his bed because he now know that he brought balance back to the universe, and therefore he saved his mother, his sister, Frank and his love etc... he is not alone and by dying himself he also know that the future would not repeat itself as he was the catalyst to it all. His sacrifice is ultimately to him also his salvation.
Destiny is now happy, because in the timeline conundrum, the future engine has now a cause it did not have before. The timeline has looped back, and will now continue in whatever way Destiny wants. The present accident has now a timeline that caused it. Donnie is dead, but Destiny doesn't care. All is well.
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** I am normally not a praying man, but if you are up there, please save me Superman **