In response to Krin Gabbard's examples of diagetic music that became
extra-diagetic, I would also mention the use of "Moon River" in
BREAKFAST AT TIFFANY'S and the use of a song called "We Never Danced"
in MADE IN HEAVEN.  In the latter, the melody of the song
(written by Neil Young who also has a cameo) haunts Timothy Hutton's
character through much of the story (he plays it on his trumpet) and
then appears on the soundtrack as extra-diagetic.
 
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