When American teenager Nancy Thompson (Heather Langenkamp) begins to suffer from nightmares, she discovers that many of her friends are having similarly disturbed sleep. Their dreams are haunted by the hideously scarred former child murderer Freddy Krueger who, it soon transpires, has the power to kill them in their sleep.

Freddy is out to exact his revenge on the children of those who burned him alive in retribution for his crimes. The only way to avoid Freddy's reprisals is to avoid sleep, but Nancy knows that she can't stay awake for ever...