Thank you for consulting HCM.
As you have said your both friends are seeing people and also talking with them. It is not a very good sign. This is called HALLUCINATION(unreal feeling or perception without any external stimulus).
There are 5 types of HALLUCINATION-
1. VISUAL- Seeing unreal things
2. AUDITORY- Hearing unreal sound
3. OLFACTORY- Abnormal smelling sensation
4. GUSTATORY- Abnormal taste sensation
5. TACTILE- Feeling abnormal touch sensation in skin
Here they are suffering from VISUAL as well as AUDITORY HALLUCINATION>
Auditory Hallucination is most commonly seen in Several Psychotic disease(Most severe is SCHIZOPHRENIA
Visual hallucination though not very common but may occur in SCHIZOPHRENIA and other psychotic disorder
. It is most commonly seen in ADDICTION, ORGANIC CAUSE- Brain Injury
, Abnormality in several composition in brain etc.
So A very detailed history and evaluation is needed, dont waste time go to a good psychiatrist
Earlier you start treatment , more will be the chance of cure.
Best of luck.