Following up the previous Nightmare film, dream demon Freddy Krueger is resurrected from his apparent demise, and rapidly tracks down and kills the remainder of the Elm Street kids. However, Kristen (who can draw others into her dreams) wills her special ability to her friend Alice. Alice soon realizes that Freddy is taking advantage of that unknown power to pull a new group of children into his foul domain.
Continuity mistake: At Rick's funeral, Debbie gives Alice her spike bracelet. The spikes are flat and there aren't that many of them, but at the end when Alice is getting decked out to fight Freddy she pulls the bracelet out of her drawer, and the spikes are very menacing looking and there are more of them. (00:55:25 - 01:13:20)
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