How does the Navy SEALs and Navy Officer Security Clearance and background check work?

So I have been doing my research and found out that honesty with the recruiter is the best policy and to admit to any prior drug use to the doctor at MEPS. Then I found out that they will leave no stone unturned when doing your background check and will even call your friends and family to backup your claims.

What I want to know is, how does this work?. Who do they call to ask questions about someone when getting your clearance? Is it just the people you list as references or random acquaintances?

I dont want to go in forgetting I was prescribed pain medication for wisdom teeth removal or something like that and then have then DQ me if they find out in the background check.