Our objectives in this article are to bring some theoretical order into developmental sequences and simultaneities in children’s ability to appreciate multiple labels for single objects, to reason with identity statements, to reason hypothetically, counterfactually, and with beliefs and desires, and to explain why an ‘implicit’ understanding of belief occurs before an ‘explicit’ understanding. The central idea behind our explanation is the emerging grasp of how objects of thought and desire relate to real objects and to each other. To capture (...) this idea we make use of the notion of discourse referents, as did Perner and Brandl (2005), to explain the developmental link between understanding beliefs and alternative naming. We present confirming evidence of the prediction from this analysis that children should have comparable problems with understanding identity statements. We explain the precociously correct answers in ‘implicit’ false belief tests based on indirect measures in the following way: From infancy children are able to keep track of other people’s experiences, to reason about counterfactual circumstances, and to reason about goal-directed (rational) action depending on given circumstances. Indirect tasks reduce the bias to use actual circumstances for reasoning about goal directed action compared to the traditional task, which leads to more correct answers. An emerging metarepresentational understanding helps overcome these biases and enables not only correct action prediction but also the explanation of erroneous actions. The common metarepresentational element explains why false belief tasks and the alternative naming task are mastered at the same time as children understand identity statements. (shrink)