Plot
The film begins by introducing Kellyanne Williamson, playing with imaginary friends Pobby and Dingan. The family of Rex Williamson—his wife, Anne, daughter Kellyanne and son Ashmol—have moved to Coober Pedy, known as the "opal capital of Australia", because Rex believed he could make a fortune in mining opal. So far he's had little success. Ashmol, while he loves his sister, is frequently annoyed when she talks to her imaginary friends, and some of the kids at school tease the siblings because of them.
Rex and Anne decide it is time to separate Kellyanne from her invisible companions. Annie takes Kellyanne to a Christmas party at Annie's friend's house, Rex telling her that he will let Pobby and Dingan come with him to go opal mining. Upon Rex's return, Kellyanne says she can no longer see them and that they have disappeared. She insists on going to the opal mining area to look for them, accompanied by Rex and Ashmol. The family accidentally strays on to a neighbouring miner's claim. The miner, Sid, pulls a shotgun on Rex and calls the police, thinking that Rex was "ratting" on his territory - that is, looking for opals on his turf.
Kellyanne is grief-stricken at the loss of her imaginary friends and takes ill, although doctors can find nothing physically wrong with her. Rex has to leave his opal claim. Annie loses her job at the local supermarket, thanks to the circulating rumours around Rex's arrest. Convinced that Kellyanne is faking her illness, Ashmol nonetheless goes along with her wish that he try to find Pobby and Dingan. He even comes up with the idea of putting posters around town. Ultimately, returning to his father's mine area, Ashmol finds two lollipop wrappers. Deeper in the tunnel, he finds a large opal which he takes back to Kellyanne. He tells her he has found Pobby and Dingan, and that they are dead.
Kellyanne, whose sickness has been worsening, has to go to hospital. Ashmol sells his opal and pays for a funeral for Pobby and Dingan. He has made friends with a lawyer, who takes Rex's case. Rex wins the trial.
Many people in town begin to feel that their attitude toward Kellyanne and her family may have contributed to her sickness. These people show up at Pobby and Dingan's funeral. Kellyanne, though still sick, is there, and throws lollipops into her imaginary friends' graves. A short time later, Kellyanne herself dies, and is buried between her imaginary friends. Ashmol visits her grave. Rex gets his claim back, and Ashmol is allowed to accompany him on mining trips.
Ending
In the original release of the film, the death of Kellyanne was not shown; after Pobby and Dingan's funeral, the screen fades to white, and the film ends. This cut was made against the wishes of the director and crew but did air uncut and as originally intended when shown on BBC Two in 2008.
