How do you make friends and how do you stop daydreaming?

I recently came across this forum, and I read some stuff about APD. I was amazed, scared, and relieved. I read the symptoms of APD, and it's like somebody just read my mind. Although I don't think my APD is as severed as some of the members here, I do live in almost total isolation.

I was very outgoing when I was younger. But something in my life changed, and so did my personality. I started isolate myself from the world, and just live in isolation. I isolate myself to stay away from all the negativity in life. I isolate myself to solve my social issues. I thought, if I don't have a social life, I don't have to worry about anything. I live in isolation for so long that now I don't even know how to talk to people. I don't know how to make friends, and I simply just don't know how to socialize.

Sometimes my emotion got hold of me, and I felt so embarrassed that I had to get out of the situation. But the reality is that the situation wasn't that bad. I remembered one time at a xmas party with my father's old friend. The guy's son play piano really well, and everybody was cheering for him. All of a sudden, my jealousy and embarrassment got out of control, and I had to get out of the party. In fact, nobody really cared if I know how to play piano or not. I think APD is a self reinforcing cycle. The longer you have APD the worse it gets. I used to be just shy, but now my emotion has got hold of me.
I have panic attack a lot more often. If I was expect to say something in public, somehow the anticipation made things worse. My mind would go blind, I couldn't think or say anything. I could feel my heart jumping like crazy. As a result it's hard for me to talk to anybody because I don't know what to say, and my panic attack make things worse.

My other major problem is daydreaming. My daydreaming were nothing but fantasies. I would dream that I'm the super hero that saved the world. I watch a lot of movies, and I would often include myself into the movie with my daydreaming. I got real emotion after I see some sad story, I could feel the emotion the character feels. It's not just being sensitive, it's a detachment from reality and nonsense fantasy.
My daydreaming has gone worst over the year. I spend more and more time on daydreaming. I would sometimes spend TWO TO THREE HOURS A DAY on daydreaming. It's gotten so out of control, that it interrupted my life. I couldn't find time to do the things that I needed to do (homework, study, works).
The problem with my daydreaming is that I would ultimately feel a sense of joy out of it. The sense of joy would cause me to daydream even more. It's gotten out of control!!!

I tried to talk to people, and I enjoyed it. Making a real contact with a real human make me feel good. My question is, how do you talk to people? How do you start a conversation and keep it going?
I'm always the odd one in the conversation that makes the conversation really awkward. Sometimes I got so emotional, I would start arguing with people. All to often, my conversation became an unpleasant argument with an awkward silence in the end.
I also need to learn how to stop daydreaming. For me, daydreaming is NOT OKAY. I have wasted significant amount of my life on these stupid, nonsense daydreaming. I HAVE TO STOP!!!
HOW? Came someone please teach me how?

thank you.

Daydreaming/Fantasizing - How do you stop it. To be honest I'm not sure. Personal my principle fantasy escape world has always be war & military history. Whether it be reading about it, playing wargames on the computer or went I was a teenager, drawing pictures of soldiers, tanks and etc.

But in the last few months my interest in this world has decline to a point where I have very little interest in it. I can only put this down to me pushing my safety boundaries and trying to be less avoidant.

Talking to people/starting a conversation. - This is tough one. My advise to try found something you have in common with person or something about them you can talk about. Once you do this conversation can become more easier. But is not easy and it takes practice.

For example the other day I was being serve at clothes shop. The shop assistant was an attractive women, usually the sort of person I have most trouble conversing with. As she serve me I notice she was the only staff member there and the shop beginning to become busy. So i said to her you must get busy work here by yourself. She said yes but there was someone else starting at 12. And it went from there. A minute later she handed me my bag, she smile at me and thank me, and I look and smile back and thank her. I left the shop thinking this talk to people thing is not that hard.

Check out this below link about find the common-denominator with people. Author is writing the article for men wishing to stroke up conversation with women, but the it ideas can apply to any situation were you interacting with people.

http://www.godisawoman.net/lunchsep14.aspx

But in the last few months my interest in this world has decline to a point where I have very little interest in it. I can only put this down to me pushing my safety boundaries and trying to be less avoidant.

See, I was going to say that too. For the past month, while wrestling with a new job, I hadn't felt the overwhelming compulsion to daydream. At first it was because of nerves, but then I was comfortable and I still wasn't doing it. Instead I was pleasantly empty and engaged with my surroundings. It came back unexpectedly a few days ago, though, and I felt like an addict getting a fix. Intense relief and pleasure. I've been doing it a lot more since then. I lose huge amounts of time to it (hours a day) but I'm not sure I want to stop or if I'd still be myself if I did.

I've had some success with methods like the one Silent describes for conversations, too. Ask people about themselves (everyone likes to talk about himself) or find anything you have in common, no matter how small. I can have like one minute conversations now, though anything deeper eludes me. Though I can't tell if that's because I'm so bad at making conversation or if I honestly don't have anything common with the people I'm around daily. Being a person drowned in internet culture, fantasy, video games and literature, it's hard to connect with people that live their lives obsessing over movies, radio stars, fly-by-night relationships, and whatever it is "normal" people do.

I think the best practice is to talk to shop assistants like Silent said. You help them do their job, and you help yourself. Especially ask for their recommendations, on best products.
As for daydreaming, you simply gotta be active. As soon as you're outside the house, you really don't have a lot of attention for daydreaming. Even when you're worried, you can't daydream. Watching, movies helps too.