Although "Freddy's Dead" should have been the end of Freddy Kruger, original Director Wes Craven had other ideas and decided to bring him back, to finish him off his own way. But as horror fans where to discover, this was to be no ordinary Elm Street film...
Reuniting original cast members Robert Englund and Heather Langencamp with original director Wes Craven. This time, not only do they all play their screen characters, but also themselves. As they find that, along with some of the other original cast members, they have started having nightmares about Freddy Kruger. But unfortunately, it seems the nightmares they've been experiencing are more than just dreams and Director Craven finds the script for his new Elm Street movie is quickly becoming a terrifying reality.
It seems that the character of Freddy Kruger is not content with living in the fantasy world of movies and so wishes to break into reality, by striking at the original cast members. Heather begins to realise what is happening and tries to convince the others. Wes knows far more than he's letting on, Robert Englund thinks she's mad and the other original cast members, which includes John Saxon and Nick Corri, aren't convinced either.
In the meantime the real-life Freddy character, who is now armed with a razor fingered bio-mechanical hand as opposed to the old glove, proceeds to start bumping off selected crew members who are either involved with the new film or had worked on the first one. As fantasy and reality merge into one, and Heather and some of the other cast members are forced to confront the real-life Freddy character in order to stop him.
When I finally got around to watching this, I was actually quite impressed. This is by far the best sequel in the series, even though they should never really have taken it past part 3. Being, essentially a film within a film that focuses on the possibility of characters from the fantasy world coming to life. Rather than just lining up more dozy teens to be picked off (even though it was rather reminiscent of "Candyman").
You can also sort-of see where he got the idea for "Scream" from with this, as the film also successfully parodies scenes from the other Elm Street movies and overall is much more satisfying conclusion to the series than the previous film.