What are the man and the woman talking about?

M: Do you know Tom?
W: Tom what?
M: Tom Smith.
W: No. But I know Tim Smith.
M: Oh, yes, you are right. It was Tim Smith, I meant. You know what happened to him the other day?
W: No, what happened then?
M: Well, he told me he saw his dead grandfather in London.
W: Oh, come on. You are not telling a ghost story, are you?
M: But he told me it was true. You see, his grandfather used to be an army officer during the war. And because he didn’t return home after the war, everybody thought he had been killed in the war.
W: But then, he suddenly appeared alive, like in those films.
M: Exactly. Tom, oh no, Tim, told me that by chance he saw an old man at the railway station selling newspapers. And he was surprised to see someone like his great grandfather in a picture he had seen. So naturally he went to the man and asked him whether his name was Smith. And the man, I mean, his grandfather, said yes, and after that everything just happened like a film.
W: Amazing. But why didn’t the old man go back to his hometown after the war?
M: Well, that’s another long story. I’ll tell you later.