Kristen Parker (Patricia Arquette) is staying up late because she's been suffering nightmares lately, and is filling her time by making a model of a house that is haunting her thoughts for some reason unknown to her. Her mother gets in from a date and tells her off because it's after one o'clock in the morning, and sends her to bed, whereupon Kristen nods off and begins to dream. She is outside the house she has been recreating, and sees a little girl there who rides her tricycle inside despite Kristen's warnings, so the teen follows her where strange and terrifying things begin to occur, all of them to do with being chased by a mysterious figure with a claw for a hand...
Who could that be? There wasn't a young moviegoer in the world who didn't know, and this, the second sequel to A Nightmare on Elm Street, made more money than the previous two instalments thus guaranteeing its power as a cash-generating franchise for New Line for decades to come. Here was set out the style that those future follow-ups would adopt, originally based on a script by series originator Wes Craven, though much rewritten by others, including soon to be acclaimed director in his own right Frank Darabont. Craven would get his chance to reshape the franchise to his own ends with New Nightmare, but before that, and indeed after it, would be efforts following this movie's lead.
How to make an Elm Street movie, then. Assemble a group of young actors, get them to have troubled dreams which the bad guy Freddy Krueger (Robert Englund was back) could invade, pick them off one by one in effects-filled sequences, and then have the villain vanquished by dint of some hitherto unknown Achilles Heel. Oh, and don't forget a little wink to the audience that says, don't worry, there will be another one of these along presently for the final shot. When Dream Warriors was released, this all seemed fresher than it does now, naturally because it set the agenda after what many see as an embarrassment of Part 2, but for all its cynical marketing ploys, it still stands up as not bad at all.
The setting for this is a mental hospital for troubled teens, which is where Kristen is sent after Freddy devises a "suicide" attempt for her in her sleep, and what do you know, the new doctor there is none other than Nancy Thompson, with Heather Langenkamp making a return to the series in her signature movie role. Nancy can relate to the patients because she knows well enough that Krueger is real and he is trying to bump off what turn out to be the offspring of the parents who killed him way back when, although she doesn't manage to save them all, hence there's one unlucky chap who gets turned into a puppet with his veins for strings, and another girl who ends up with her head smashed through a television screen when it becomes animated.
As with the first, Part 3 is resolutely on the side of the teens all the way, which explains the popularity with the young audiences of the time, and there's a sincere aim to offer those who are psychologically damaged in some manner a chance to gain power back to their lives, even if it is on a strictly metaphorical level with Freddy as the embodiment of their crippling problems. Kristen is really our main character, so it is she who instigates the whole Dream Warriors thing by bringing the others into the dreamworld where they all have X-Men style abilities, all the better to bring their tormentor to his knees, as meanwhile in the real world Nancy's colleague and possible boyfriend material Dr Gordon starts behaving as if he were in a Hammer horror with his talk of consecrated ground and gathering holy water and a crucifix. The fact that he is played by Craig Wasson, who bears quite some resemblance to Robert Englund, is something to muse over, but this was the best sequel until New Nightmare happened along. Music by Angelo Badalamenti.