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Yeah, I am inclined to agree that it really did happen, all of it, even the ending, purely on the grounds that this movie is a fantasy. I, like many others, heard many good things about this movie. I liked it, but I felt a little like my expectations were not met. I suppose that's often the case when we place high expectations on things like this.
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(SPOILER)Well, at the end when the Captain was chasing here, the wall opened up for her to run through, yet the captain just saw the wall, that is what makes me think that half of the fantasy happened.