Psychopath Freddy Krueger—known as the Springwood Slasher—murdered several children with a glove outfitted with razor blades attached to the fingers. When a foolish decision by a judge sets him free, Krueger is hunted down and burned to death by an angry mob of the parents whose children he terrorized and murdered.
Years later, the children whose parents were responsible for Krueger's death—including Nancy Thompson, daughter of the police officer who arrested Krueger—are experiencing terrifying nightmares involving a strange burned man in and old fedora wearing a glove with razor blades on the fingers.
Nancy soon finds out that whatever happens in the dreams also happens in real life when her best friend Tina dies in her sleep during a dream confrontation with Krueger. Nancy realizes she must face Krueger and engineer a trap to catch him and put a stop to his reign of terror—or never sleep again.