The real Hermione Granger was still alive, but once Draco's mother was out of Azkaban and learned the story of how she now had a step-daughter named Hermione Jaqueline Malfoy, she made quick work of finding a muggle who they could plant as a faux Hermione. Draco had paid Hermione's parents a visit after the body had been found, leaving them flowers on their door step to show his parents-in-law respect. It was the first and last time he saw them.