Horror franchises have a lifespan. And all horror franchises exceed that lifespan, shuffling along like zombies, mere imitations of the life they once had. The third entry in the Nightmare on Elm Street franchise still has life — a shitload, in fact — but the signs of franchise decline are also very apparent.
Wes Craven returns to write after sitting out the previous film, alongside Bruce Wagner, Frank Darabont, and Chuck Russell. Russell also directed. Craven’s participation means the return of the murderous and sadistic Freddy Krueger (Robert Englund) to the realm of dreams, rather than wandering around in the waking world — the expansion of Freddy’s supernatural abilities from the previous film retconned. In fact, this film makes no mention of the previous entry, instead serving as a sequel to the first film in the franchise.
Patricia Arquette, in her debut, stars as Kristen Parker, a teenager who is being stalked by Freddie in her dreams. After a particularly nasty encounter, Kristen finds herself committed to a mental hospital. The other patients in her ward are all teenagers, and all of them are also being hunted by Freddie. Their doctors, led by Neil Gordon (Craig Wasson), think these teens are suffering sleep disorders and nothing supernatural. 
That changes when the protagonist from the first film, Nancy Thompson (Heather Langenkamp), shows up on scene. She was so traumatized by the events of the first film that she has gone on to graduate studies in psychology and sleep disorders, in the hopes of preventing Freddy from ever killing again.
Before that can happen, Russel makes sure viewers won’t get bored by having a couple of the teenage patients meet grisly ends. So sorry, Bradley Gregg and Penelope Sudrow. No third act for you!
What follows is a game of cat and mouse between Freddy, and Kristen and the others. Unlike the first film, though, these teenagers have a secret weapon. Kristen has a psychic ability wherein she can draw others into her dreams. That, combined with the ability to dream lucidly, means that these teens are not defenseless. In their dreams they are like low-rent versions of superheroes. They all have some kind of power. Kristen can leap around and bounce off of walls. Kincaid (Ken Sagoes) has rock-smashing amounts of strength. Will (Ira Heiden) is a wizard. Joey’s (Rodney Eastmen) superpower is being tied to a bed with human tongues, and Taryn (Jennifer Rubin), well, she has a pair of switchblades and a mohawk, so that’s something.
Much praise goes to the special effects crew. They did some nasty work, without overwhelming the viewer. A couple of the effects come close, though. It was a fine line they walked.
It makes for a bloody, gory mess. And the movie’s theme song was done by Dokken! How 1987 is that? It’s too bad the rest of the soundtrack is synthesized crap. They must have spent their entire music budget paying for Dokken’s hairspray. The soundtrack is so bad it’s a drag on this film’s watchability. Shame on you, Angelo Badalamenti. You’re better than this.
And there it is. Watchability. Lest I heap too much praise on this film, it is in the Shitty Movie Sundays Watchability Index for a reason. It’s a splatterfest with little regard for seriousness, the exception being the very disturbing Freddy Krueger origin story told by a mysterious nun (Nan Martin). It’s a departure in tone from the rest of the flick second only to Phoebe Cates’s story about her dad in Gremlins. It’s such a bummer compared to watching Kristen get half-swallowed by a giant Freddy Krueger snake.
This is not great cinema, but it sure is a fun horror flick. As such, A Nightmare on Elm Street 3: Dream Warriors makes it into the hallowed top fifty, displacing White House Down at #36. Check it out.