I think that all of the main characters in Beloved
struggle with facing reality. So they create their own realities. And then they
live in those illusions.

Denver grows up isolated from the world around her so she
seems to think that everything outside of the walls of 124 is evil or will some
way bring her harm. She has lived vicariously from her mother’s stories, which
seem to be the main cause of her fear. So I instead of facing her fears she
draws away from society which is not good for anyone, especially a child.
Denver is so desperate for a friend that she starts to play with the
"ghost" of her dead sister. This leads me to believe that the ghost
is not really real but she is in Denver and Sethe's mind. Both women get so
drawn into the house that they blur reality and fiction in their lives in that
house. I think Denver believes in the ghost because she doesn't know anything
any different and has a need and desire for a friend. And then when Beloved
comes she is finally able to put an idea with something tangible. Denver then
develops an obsessive and unhealthy relationship for this girl. I also don't
think that Beloved is actually Denver's dead sister reincarnated. I think that
without knowing it Sethe and Denver made her into the dead baby because in
their skewed reality Beloved was still alive.

And this is where the illusion starts to crumble. Sethe
and Denver actually mix reality with fiction which illuminates the flaws of
their illusion. If Beloved was actually the dead baby their illusion wouldn't
have changed. But it did change. The arrival of Beloved forced Denver to go out
in the world which allowed her to actually see reality for the way it is.
Beloved also forced Sethe to face her past. Sethe had allowed herself to live
in memories of the past of her choosing. But once Beloved showed up she started
remembering both the good and the bad and with outside help it would have
ruined her. Paul D was her outside help along with Denver. He encouraged Sethe
to live for tomorrow instead of reliving the past. And he reminded her that she
was her own best thing. Paul D was living in his own distorted reality but with
Sethe he realized that he needed to start living reality again too. And
together they will ‘set their stories next to each other” and will start living
reality again.