There they were, the Red Hot Chili Peppers were in Mexico! They visited Baja California which means "Small California". Once there they were so desperate to write a song that they named it "Dani California " after a guy they met there whose name is "Danny". (Please forgive Anthony Keidis' Bad spelling, he failed every elementary spelling test). The lyrics were written by Flea 1 week after the name was made, he was drunk and just got cut off by a lawyer from California, hence the line, "california rest in peace". There were additonal lyrics about why California is resting in peace, but the RHCP had to cut it out to avoid political outrage and make the album suitable for children.
Dani California's real name is Danny Frot, he is your everday normal guy and is not special or famous in anyway. He just got a song in his name after he met the RHCP in Mcdonalds. They asked his name after he took their order and they liked the way it sounded. Within months the song was famous but Danny never knew it was about him. Anthony Keidis legally stated that the song was about all the lovers in his life. In a way it's true because he loved only two people, you see. After Mcdonalds, Anthony snuck out to met Danny and they loved each other and spent the night at Danny's. Note that the lagl statement says "lovers", well, Anthony Keidis used to love Flea but they broke up but often meet for sex.