it actually for me it depends on your take on it, i have seen this movie several times, and depending on the mood I think the ending is different.

here are the interpretations that i have come to think of, @ work, so i cant open the movie to see it again.

1.- the mother imagined all the things.

traumatic events of seeing her child died, caused her to create a love story for his son, on which he comes out as a hero by sacrificing him self to save others{i.e. locking a pedophile, saving Franks and his girl, etc.}

2.- Donnie lived all and went back in time, sacrificing himself to avoid the loss of all the lives. He got back in time, and he started laughing for he had just traveled in time and "won" in his perception, cause, he was sort of a catalyst in those event, thus, deleting himself, creates a new future completely.

3.- He was crazy, and imagined his own life before dying.

that is what i can remember Right now

{No grammar check @ work, sorry GN(s)}