Douglas Hall finds out that his world is actually another virtual reality world in itself. Whitney is killed in the 1937 L.A. virtual world which brings his 1937 counterpart into Douglas' world. The same thing happens with Douglas' future "real" world counterpart, who is killed in Douglas' world, thus Douglas and Jane live happily ever after (of course) in the "real" world. Douglas Hall did kill Fuller (at the beginning of the movie) but it was another user "inhabiting" Doug's body. Mr. Fuller is alive and well in the "real" world (the year 2030something or 2040something). In a nutshell: the 13th floor is simply a virtual reality world within a virtual reality world.
Continuity mistake: After Hall has been shot in the leg in the simulation of LA 1937 the hole in his trousers and his injury disappear, as seen in the fight sequence at the pool. Hall even uses his leg to hit the bartender in the stomach, what would have made this very painful if he had been shot there.
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