When we say SQL Server then we are saying RDBMS.
Then there is normalization INF, 2NFand 3rdNF..., this is your question how to normalize a user and his friends data base.
My View, you need three tables
Individual (IndId (PK), Name ...)
User (UserId (PK), IndId (FK to Individual Table), login, password etc)
Friends(FID(PK), UserId (FK to User Table), IndId (FK to Individual Table))
Get all friends of a user
Select I.* from Friends F
JOIN User U on F.UserId=U.UserId // Get all friends of all users
JOIN Individual I on I.IndId =F.IndId // Get there names etc
Where I.Name = 'MyFriend' // filter a friend