Considered by many as "the" sequel to see this has the original's star (Heather Langenkamp) and creator (Wes Craven; who co-wrote) returning to the fold to create a grandly entertaining entry.
Patricia Arquette makes her film debut here as a troubled girl who's having nightmares of our pal Freddy and ends-up being admitted to a youth mental institution. Well it turns out all the kids there are dreaming of Freddy too, so in comes Nancy (Langekamp's welcome return) who is now a dream specialist. It's here they start getting killed by our razor-handed anti-hero and have to group together and use their special dream skills (they each have a talent that's manifested in their dreams) to take-out Freddy.
Unlike the previous entry this one doesn't stumble with the ball. It introduces the new angle of "troubled teens" and not only does it work well it turns out being a very smart move on the part of the writers. Director Russell (who'd later do the wicked remake of The Blob in 1988) keeps it stylish, the cast does fine (though Arquette tends to scream too much), it's well-paced and it sports above average effects work.
All-in-all this is one fun, gruesome (the marionette scene is particularly effective) and top-notch sequel that deserves its reputation as the best sequel in the series.
Directed By: Chuck Russell.
Written By: Wes Craven, Frank Darabont, Chuck Russell, Bruce Wagner.
Starring: Heather Langenkamp, Patricia Arquette, Larry Fishburne.