I know that I am a little late on this one. If you do not already have the answer here it is.
When the engine of the plane fell through a worm hole sending it back into time, it created and parallel universe. Keep in mind that at this point in time everything has already happend because the engine went back into time. You only have a short time to send the original object through the original worm hole to close the universe, hints why he is given super human power. Its not easy to throw a jet engine up in the air.
The one select as the superhero is usually the one that is closest to the object. There are several people that are selected to help the chosen one (Donnie) succeed in his quest. Thay are know as manipulated living, they include Gretchen, the teacher that gave him the book, his psychiatrist, Frank (bunny guy) and a few others. The ones that are selected to stop him are know as manipulated dead and they include his teacher (the one he told to forcefully put the life line in her anus) the 2 boys messing with gretchin the day he talked to her, and the weird child porn guy that everyone loves.
Frank (rabbit guy) is nothing more than a premonition that comes to Donnie to help him achieve his goal and give him clues. He had him flood the school so he would meet Gretchin, he had him burn down the modivational speakers house so the police would find all the child porn and the teacher would ask Donnie's mom to go on the star search trip to ensure that plane would be where it was suposed to be when the engine fell off and throught the worm hole.
After Donnie gets the engine back through the worm hole the parallel universe is closed and time goes back to when the universe was opend. Everything that happend during the time of the parallel univers is remembered as deja vu. As for what happens to Donnie ( dont want to ruine the move for anyone who has not seen it) either he was so happy he succeeded he forgot to get out of bed or that he is the only one that remembered and it was his destine because he didnt want to end up like Ms. Sparrow (the old lade that checks her mail and wrote the book that he uses as his guid through this.
If you have any other questions let me know and I will answer them. There is way more to this move but you wont read it all if I put in this post.
Again, I know I am a little late but I hope this helps to answer some questions.