A Nightmare on Elm Street Part 2: Freddy’s Revenge – A new family moves into the house on Elm Street, and before long, the kids are again having nightmares about deceased child murderer Freddy Krueger. This time, Freddy attempts to possess a teenage boy to cause havoc in the real world, and can only be overcome if the boy’s sweetheart can master her fear.
Five years have passed since Freddy Krueger was seemingly defeated and the Walshes have moved into the Thompsons’ former home. Their teenaged son, Jesse, has a nightmare about being stranded on a school bus with two girls and being stalked by a violent killer. He wakes up in terror and attributes the dream to the unusual heat in the room. Jesse goes to school with his friend Lisa, whom he is interested in romantically, but is too shy to flirt with her. After getting into a fight with a boy named Grady during gym class, Coach Schneider makes them stay after class and they eventually become friends. Lisa comes to visit Jesse after school and they discover a diary from Nancy Thompson detailing her nightmares which are strikingly similar to Jesse’s. Small fires happen around the house, which culminates in the spontaneous combustion of their pet birds. Jesse’s father accuses him of sabotage. Lisa takes Jesse to an abandoned factory where Fred Krueger worked, but they find nothing there.