Directed by: Renny Harlin
Starring: Robert Englund, Brooke Bundy, Lisa Wilcox, Rodney Eastman, Andras Jones, John Beckman, Kisha Brackel, Wanda Bursey
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)
Freddy Krueger: You flunk.
Trivia: Check out the nurse that wakes Kristen up at the school infirmary. It is Robert Englund, out of his Freddy make-up. After Kristen wakes up, it is a different person.
Question: Why does Freddy use Alice to gain access to new victims?
Answer: He'd killed her friends in the previous movie, remember? When he came back she'd had time to recover and make new friends.
That was Kristen, not Alice. Alice gives the answer to this question herself, while talking to Dan in the diner. She says that Kristen was the last of the children of the people who killed Freddy, and "maybe Freddy can't get to the new kids unless there's someone to bring them to him."
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Answer: As Kristin was being burned to death in the boiler, she passed her ability to pull other people into her dreams to Alice. This enabled Freddy to get new victims.