Basically, it is about a boy that is granted a chance to live in another, tangent universe. This means he's is an alternate reality, where he will not die of a plane engine falling into his room.
Frank, the bunnyrabbit, appears for him as a vision... not sensed by anyone else. Frank is there to tell Donnie when his reality will end... and Frank is the chosen person, because he is the one responsible for the main reason Donnie doesn't want to continue this life: the death of his girlfriend.
So, by returning, and starting all over again, Donnie is not tormented by these visions, and the medicine he gets prescribed to "stop" them. The difference is, he will never meet his future girlfriend, because in this reality, he won't make it..... sadly: he'll die from a plane engine, which ironically broke off the wing of a plane (in the previous reality) his mother was in...
Hard to follow, sorry :) Doesn't let itself be explained very easily. Like Mulholland Drive. Explain that one to me.
Watch it, Cris :)