I lost my Documents folder!

I may have solved my problem even before I ask it, but I want to make sure I understand what's going on. I was performing two operations involving Finder and so had several instances of it open.

First, I was in the process of copying some files from my external hard drive to the folder Documents. Second, I was manually copying some images from another folder inside Documents.

All of a sudden, I heard a sound similar to a pop or gunshot; I thought I saw something like a puff of smoke, also, presumably indicating something bad had happened or I had zapped a file or folder.

I then discovered that one of the images I had been copying had replaced my folder Documents. I THINK what happened is that my finger slipped off the mouse, and when I put it back on I somehow dropped the image where Documents used to be.

Amazingly, my finder is still copying files to Documents, which I quickly tracked down. It's now inside MacIntosh HD > UserName

So it will be easy enough to move it back where it was when I'm finished copying my files. So to get to the point, I guess I just have two questions:

1. Is there a default folder named Documents in the master usersname folder (the one named MyName)? If so, I presumably replaced it with the Documents folder I inadvertently moved.

2. Can someone tell me what happened? Even if I inadvertently dropped an image I was copying in another location, how can it bounce a folder into a new folder?

Thanks.