Okay, so I think it's fairly evident that the Junkyard itself is a simulation, especially near the end when you've climbed the Karma Tower and Angel is rebooting the world. To what end the simualtion serves no one but Angel And Col. Beck truely know, we'll find out in the intro of DDS2. Precisely why Sera is so important to Angel is yet another mystery, what was it they called her? A digital or cyber shaman?
It's a simulation that's apparently been played out time and again going by one of Beck's remarks to Argilla right before you battle him in the Brutes headquarters in Anja. I think it was something along the lines of "You were the first to be devoured".
There are no children in the Junkyard, there is no ocean in the Junkyard, yet as the game progresses you see members of the Embryon recall precisely what these things are without truely knowing what they are. Even emotions are alien concepts to the participants of this simulation before they awaken. Gale was the last to awaken, you know when the character goes from having grey pupil-less eyesto having colored iris' and a pupil, to these concepts, he remained perpetual confused by the changes in his clanmates althroughout the game until that battle with the Lupos (or whatever) leader. Familiar landmarks from the real world are peppered throughout the game tugging at the characters memories. The Brutes headquarters in Anja, Coordinate 136, the boat that the Embryon use to trap the Brutes in.
I'm half hammered and kind of rambling, but really the ending to Digital Devil Saga only providesmore questions than answers. I wanna know why the simulation existed, who Serph, Argilla, Heat, Cielo, Angel, Gale, Varin, Sera et all are in the real world. Angel seems to know who Gale is, Varin didn't, but he apparently knew who Serph and Argilla were. Why is the real world an even more hellish wasteland? Why is it that people can transform into demons not only in the Junkyard but in the real world? What purpose did that simulation serve? All I know is I can't fucking wait for DDS2 to be released at the end of this month.