During a hallucinatory incident, young Kristen Parker has her wrists slashed by dream-stalking monster Freddy Krueger. Her mother, mistaking the wounds for a suicide attempt, sends Kristen to a psychiatric ward, where she joins a group of similarly troubled teens. One of the doctors there is Nancy Thompson, who had battled Freddy some years before. Nancy senses a potential in Kristen to rid the world of Freddy once and for all.