Why when the characters are in bed at the end of the movie, in the "Mad World montage," do they seem to recollect what happened in the Tangent Universe?
As background: at the end of the movie, after we go back to the point where the jet engine hits the house, we see…
Dr. Thurman wake up abruptly and look troubled
Karen Pomeroy asleep in bed with Kenneth Monnitoff (who is awake and looks concerned)
Jim Cunningham sitting upright in bed sobbing
Kitty Farmer deep in thought
Frank sitting on the floor touching his eye.
Essentially the characters remember what happened from the future, but now closed, Tangent Universe. The Dreams chapter in The Philosophy of Time Travel confirms this:
When the Manipulated awaken from their Journey into the Tangent Universe, they are often haunted by the experience in their dreams. Many of them will not remember. Those who do remember the Journey are often overcome with profound remorse for the regretful actions buried within their Dreams, the only physical evidence buried within the Artifact itself, all that remains from the lost world."
Also, Gretchen and Rose Darko (Donnie’s Mom) seem to remember each other, based on them waving at each other at the end of the film.
To help improve the meaning of these lyrics, visit “Donnie Darko” by Movie FAQ and leave a comment on the lyrics box