The movie starts in Springwood’s diner on a rainy night. Dean (Kellan Lutz of Twilight) sees a waitress walk by and he asks for more coffee, to which she ignores him and continues walking towards the kitchen. Dean follows her back there where he runs into Freddy Krueger who slashes his hand open. Dean jolts awake in the diner and finds Kris (Katie Cassidy) looking for him. He begins to tell her about these nightmares he’s having when he gets heated and spills his coffee on her. Kris tells him she’s going to go clean up and will be right back. Dean falls asleep again. This time, Dean tries to stab Freddy, but Freddy gets the upper hand. The diner sees Dean struggling with “himself” as they cannot see Freddy. Kris screams for him to wake up, but it’s too late. Freddy stabs Dean in the neck and seemingly, Dean cuts his own throat.
Next, Kris and the rest of Dean’s friends are at his funeral where Kris sees a little girl in a slashed dress standing near Dean’s grave. No one else can see her. After the funeral Kris is looking at the memorial pictures of Dean and sees that she as a little girl is in one of the photos, which disturbs her because she thought she met Dean in high school. Kris begins to have nightmares where Freddy appears but she manages to wake up before he can kill her.
After the funeral, Kris’ mom (a flight attendant) leaves for a couple days. To keep Kris company, her ex boyfriend Jesse (Thomas Dekker) shows up at her window. Kris feels safer with Jesse in the room, so she falls asleep only to be woken up by her dog barking. She goes outside to bring him in, only to find the dog with it’s throat cut. She screams as she sees Freddy and runs back to the house where the door is locked. The dream shifts and she finds herself back in her room. Freddy is on top of her shredding her clothes when Jesse wakes up to her screaming. Suddenly Kris is thrown violently all over the room and on the ceiling. When she finally is thrown back on the bed her torso is viciously ripped open by Freddy and Jesse is COVERED in her blood. He panics and runs to Nancy’s (Rooney Mara). Nancy wants to know why he’s covered in blood and he tells her Kris is dead. They tell each other that they are having the same nightmares about a man named “Freddy”, when Nancy’s mom comes banging on the door prompting Jesse to run…unfortunately he runs straight into the cops who take him in for the murder of Kris.
Jesse is looking extremely tired and starts to lose his mind a little in his prison cell, trying desperately hard not to fall asleep. Suddenly the prison guard comes to tell him, his parents have bailed him out. As Jesse walks out of the prison cell he realizes, he’s in a boiler room, and he’s fallen asleep. Freddy brutally murders him by stabbing through his torso from behind with his gloved hand. From here you can see Kris hanging (dead) and Jesse is hung next to her. While in the real word Jesse is dead, we are snapped into the dream world where Jesse is still alive and hung upside down next to Kris. Freddy explains to Jesse that the mind lives on for 8 minutes after the heart stops and they still have 7 minutes to play… Meanwhile…. Nancy is taking a soothing bath. She sets the alarm on her phone and falls asleep in the tub. We see Freddy’s gloved hand come up between her legs in the water and he laughs…. then the glove disappears. Nancy awakes in the bath and walks into her bedroom…where it’s snowing. She realizes she is still dreaming. She runs into Freddy…she tells him she set her alarm and he says, you did that in your dream…but she does wake up from the alarm in the bath.
Nancy’s nightmares are becoming more frequent, so she decides to stop sleeping. She’s concerned that all the people dying are her friends, and she feels that there is some connection between Dean, Jesse, Kris, Quentin (Kyle Gallner) and herself. She questions her mother Gwen who denies that they have anything in common. Quentin and Nancy start to research the teenagers involved and believes her mother is lying so they rifle through Gwen’s things. A hidden space under a drawer reveals a pre-school picture with Jesse, Kris, Quentin, Nancy and Kris along with many others. Gwen catches them and Nancy confronts her asking why she lied. Gwen cries and tells her she didn’t want her to remember the horrible things that happened to her, and she just wanted her to live a normal life. Gwen comes clean about the gardener at their preschool. It appeared from the outside that he loved the kids, Nancy most of all, and would never do things to hurt them, till they started coming home with wounds. Gwen tells Nancy that when Nancy was 5 she told her mom about a “magic cave” that Freddy would take her to and she told her about the horrible things he did to her down there. Quentin and Nancy leave determined to research the other children in the photos when Quentin’s Dad, who is also the principal of the High School, blocks her car. He tells Quentin to get into the car. Nancy begs him to come with her to investigate, but he turns her down, saying it’s over and she just needs to move on, that these are just repressed memories.
Nancy goes to the library and researches the remaining children in the picture. All of them died in some tragic way in their sleep. She watches a blog of one teenager who has obviously been awake for days; he explains that after 72 hours you begin to “dream” while you’re awake. It’s your body shutting down. Then on camera he falls asleep and we see his face being smashed into the computer screen. WHILE this is happening, Quentin is at swim practice and he falls asleep under water. He awakens outside the boiler room, naked except his Speedo, when he sees normal Fred Krueger running by screaming for help. He yells after him but then he turns back and sees a mob of angry parents shouting after Freddy. Freddy runs into the boiler room, but he is surrounded. Quentin’s father lights a gas tank on fire and throws it in the room with Freddy who ignites. Freddy comes running out on fire and dies. They hunted him and got justice without going to the police.
Quentin finds Nancy and tells her he knows what happened to Freddy. They confront Quentin’s father Alan (Clancy Brown) about them murdering Freddy when they had no proof except the word of 5 year olds. He tells them when he has kids, he’ll know why they did what they did.
Quentin and Nancy are continually dreaming while they are awake now, because they have been up too long. Nancy sees Kris in a plastic body bag talking to her. She snaps out of it and Quentin tells her they need to get more Stay Awake drugs. (Hypnocil was the name of it in the previous movies, and there is a reference to it in this movie). Quentin goes inside the pharmacy while Nancy waits in the car. She falls asleep and Freddy attacks her. She wakes up before he can hurt her. She takes the cigarette lighter from Quentin’s dash and burns herself to stay awake. She then goes inside the pharmacy looking for Quentin, but she discovers she’s asleep. They fight and she grabs a chunk of his sweater and wakes up, with the piece of sweater still in her hand, and she has 4 nasty slashes in her arm from Freddy. Quentin finds her and tells her he needs to bring her to the hospital.
Nancy is on the hospital bed when a doctor comes in and tells her she needs to give her pain meds, but they will force her to fall asleep. Nancy panics and begs her mother not to give her the drugs. The doctor pulls Gwen into the hallway telling her that Nancy needs help, and they can’t do it without Gwen’s consent. Gwen signs a form and the doctor returns to give her the shot. Nancy’s bed is empty. (Meanwhile, Quentin has stolen some epinephrine adrenaline and some syringes).
Nancy and Quentin are driving to the preschool, and in a graphic scene, Quentin stabs himself in the leg with some adrenaline to stay away. Nancy refuses the drugs, as she does many times throughout the film. Suddenly, Quentin sees Freddy in the middle of the road and swerves to miss him, crashing the SUV. Nancy and Quentin get out of the wreck and start walking down the road, only to discover they are at the preschool. They go inside to find that since the incident all those years ago, nothing has been touched or moved. Eventually Quentin notices that there is a hidden door, blocked off by wood slabs. He rips it open and has found Freddy’s “Magic Cave”. There are disturbing paintings all over the walls and crude “gloves” that Freddy created. Quentin finds a box full of pictures and he gets extremely upset. Nancy asks to see them and he says no, so she grabs them. We don’t actually get to see the pictures, but you are led to assume they are graphic pictures of Freddy molesting Nancy. She decides the only way to end Freddy is to grab him in a dream and bring him into real life to fight him. They decide she will grab him, and when Quentin sees her struggle, he will wake her up, bringing Freddy with her. He grabs the blade off the paper cutter as she falls asleep….
However, we are brought into the dream via Quentin, who fell asleep while he was supposed to be watching Nancy. Freddy wounds him, but before he can kill him, Nancy yells for Freddy…Nancy has now entered Freddy’s world. From Quentin’s point of view we can see that Freddy has hung all their dead friends from the pipes in the boiler room. Nancy begins attacking Freddy and after many attempts, he tells her, you can’t hurt me, “Your in my world bitch.” Freddy explains that Nancy was his favorite and he intentionally left her for last so she would stay awake so long that when she actually DID fall asleep, her body was induce a coma, so she’d never wake up. She starts calling for Quentin, but Freddy tells her he’s dead, and her boyfriend can’t help her, and that HE’S her boyfriend now. She finds herself running through her house on Elm Street. She’s running from Freddy down the hallway but the floor melts to blood and she starts drowning in it while Freddy laughs. A shift in the dream finds her in her bed wearing a little girl’s dress. Freddy gets on top of her and tells her it’s his favorite dress and starts to touch her and cut her with his blades. Finally, Quentin wakes up from all the screaming and struggles to wake Nancy up. He gets the bright idea (a la Pulp Fiction) to stab Nancy in the heart with adrenaline, and JUST as Freddy is about to end her life, she pulls him into the real world. Freddy is attacked by Quentin and while he is trying to kill Quentin, Nancy comes from behind and slices his gloved hand off with the paper cutter blade as she says, Welcome to my world Bitch, then she slices his throat open. Quentin (having been stabbed in the chest with Freddy’s glove) grabs her and tries to pull her out to leave. She stops, torches the place and then they run out.
FADE TO BLACK…
Later…Nancy is coming home with Gwen from the hospital. Gwen tells her to go straight to bed. Nancy looks at her mother and behind Gwen is a mirror but it’s not Gwen’s reflection she sees, it’s Freddy’s. Freddy grabs Gwen and slices her open and pulls her back through the mirror as Nancy screams in horror.
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