In bilayer quantum Hall systems at filling fractions near nu=1/2+1/2, as the spacing d between the layers is continuously decreased, intra-layer correlations must be replaced by inter-layer correlations, and the composite fermion (CF) Fermi seas at large d must eventually be replaced by a composite boson (CB) condensate or 111 state at small d. We propose a scenario where CBs and CFs coexist in two interpenetrating fluids in the transition. Trial wavefunctions describing these mixed CB-CF states compare very favorably with exact diagonalization results. A Chern-Simons transport theory is constructed that is compatible with experiment.
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