Revealing mistake: When Nancy is running up the stairs in her house to escape Freddy for the first time her foot hits the steps and go through the steps into some goop. Look at the steps above that step and you can see the pre-cut holes where the next sets of goop will be. (00:39:10)
Visible crew/equipment: When Nancy is in the dream clinic the doctor attempts to give her an injection. As she pushes the doctor away, the bedsheet falls slightly and Freddy's hat can be seen for a couple of seconds. In the next shot, the sheet is above her waist again at which time she reveals that she pulled the hat from her dream.
Visible crew/equipment: When Nancy's mother is pulled through the door window, a tape marker can be seen on the blue door, above the door handle. (01:25:15)
Continuity mistake: After Nancy wakes up from her nightmare in the dream clinic, her mother discovers her arm is scratched. The tape that was on Nancy's chin has gone, but returns in the next shot, only to disappear in the next. (00:48:50)
Visible crew/equipment: Right at the end of the film, when Nancy's mother is pulled through the front door window by Freddy, you can easily tell it's a dummy. (01:25:10)
Revealing mistake: When Nancy is running upstairs, and struggling in the goop holes, we see a shot of Freddy smash his arm through the small door window. If you play in slow-motion, you can see a large pre-made crack in the window to make it easier for him to smash, which WASN'T there when Nancy ran through... (00:39:15)
Factual error: When Glen and Nancy are talking on the bridge, you can see huge palm trees in the background. Though this was filmed in California (hence visible palm trees at the cemetery), the fictional Springwood is supposed to be in Ohio - they show the location of Springwood on a map at the start of 'Freddy's Dead, the Final Nightmare', and there's no other conflicting in-universe location given within the series. So it's established as Ohio, but there are no palm trees in Ohio. Other California "hints" add to the mistake, such as CA license plates, etc. (00:01:00 - 00:43:22)
Continuity mistake: In one scene Nancy's mother is pouring herself a drink, then Nancy enters the room and she switches off the TV. Then Nancy and her mother start talking about going to school, and behind Nancy's mother on the worktop, a white alcohol bottle can be seen. But after their conversation when Nancy leaves, the bottle of alcohol is gone. (00:19:40 - 00:20:30)
Answer: 1. Freddy is the ghost of a child killer, he is very difficult to be rid of. He did not die at the end of this film. 2. It is possible to bring items and even people in and out of the dream world. Although it is never explained in detail how. 3. It was a dream, but as seen in the film, that's not a good thing.
MasterOfAll