At the time of its release, this second sequel broke several box office records for independently-produced films, making a lot more money at the box office than the first two. Adding to the ever-changing mythology of our favorite pizza-faced night stalker, Freddy Krueger (Robert Englund) returns through a spiritual loophole because his body was not buried in consecrated ground. He's still invading the dreams of the Elm Street children (who are now all in a psychiatric hospital) and killing them off in macabre ways, passing the murders off as suicides. Heather Langenkamp, sole survivor from the first film, returns as Nancy, now working as a "dream therapist" and teaming up with a doctor (Craig Wasson) to help protect the potential victims and end Freddy's reign of terror once and for all. Also returning from the original is John Saxon as Nancy's (ex-)policeman father, who has turned to the bottle to cope with the events of the first film. And how about that big reveal that Freddy is not only a child predator and mass murder, but also "The bastard son of a thousand maniacs" (!?)
Outstanding special effects, imaginative death scenes and the clever ways Freddy materializes on screen before each murder help to camouflage the fact that this is essentially a thinly-plotted, awkwardly-acted film with more accent placed on the technical skills of the fx department than on anything else. There's a Freddy puppet (brought to life through stop motion animation), a giant Freddy, a sexy nurse turning into Freddy and spitting out tongues, a Freddy snake, a Freddy television set, an animated Freddy skeleton and lots of other cool touches throughout. It took four people (including Wes Craven, Frank Darabont and the director) to come up with all this mumbo jumbo and Angelo Badalamenti (TWIN PEAKS) did the score..
The cast includes Patricia Arquette (in her film debut) as Kristen, Rodney Eastman, Ken Sagoes and Brooke Bundy (all of whom would return for Part 4; while Arquette's part was recast with another actress), Laurence Fishburne as a hospital orderly, Priscilla Pointer as a doctor, Jennifer Rubin (who would appear in BAD DREAMS the following year) as a former drug addict and cameos by Dick Cavett and Zsa Zsa Gabor on a TV set. The soundtrack features the hit song "Dream Warriors" by metal group Dokken.