This article examines the mainstream categorical definition of coreference as "identity of reference." It argues that coreference is best handled when identity is treated as a continuum, ranging from full identity to non-identity, with room for near-identity relations to explain currently problematic cases. This middle ground is needed to account for those linguistic expressions in real text that stand in relations that are neither full coreference nor non-coreference, a situation that has led to contradictory treatment of cases in previous coreference annotation efforts. We discuss key issues for coreference such as conceptual categorization, individuation, criteria of identity, and the discourse model construct. We redefine coreference as a scalar relation between two (or more) linguistic expressions that refer to discourse entities considered to be at the same granularity level relevant to the linguistic and pragmatic context. We view coreference relations in terms of mental space theory and discuss a large number of real life examples that show near-identity at different degrees.