When a person (normally a Regan) completely modifies/ changes a story or series of events with their self destructive narcissistic personality, making it completely and utterly unbelievable.
I was walking my dog yesterday and sore a rainbow.
The Reganified version would be something like: I was walking my unicorn yesterday and there was a shower of rainbows, then a magic carpet appeared and I went for a ride with all my new unicorn rainbow friends. It was totally awesome, then we had ice cream and I was totally tripping balls.
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