John Twiller takes down his high school yearbook and begins to reminiscence about that time he first moved into the neighborhood in 1956. His teenage self, Jack is obsessed with Lily one of the more popular girls around. The sole obstacle is Angelo, her bullying boyfriend. With the help of his pals Crutch, Floyd, and Spider, he makes every attempt possible to change her mind.

Freddy Krueger is resurrected from his apparent demise, and rapidly tracks down and kills the remainder of the Elm Street kids. However, Kristen, who can draw others into her dreams, wills her special ability to her new friend, Alice.