Following up the previous Nightmare film, the dream demon Freddy Krueger is resurrected from his apparent demise, and rapidly tracks down and kills all three of the surviving Elm Street kids. However, Kristen Parker (who has the ability to draw others into her dreams) wills her special ability to her new best friend Alice Johnson before her demise. Afterwards, she soon realizes that Freddy is taking advantage of that unknown power she now wields to pull a new group of teenage children into his foul domain. Can Alice embrace her new power to finally defeat Freddy or is it already too late?