A Nightmare on Elm Street 3: Dream Warriors is a 1987 American fantasy slasher film directed by Chuck Russell. The story was developed by Wes Craven and Bruce Wagner and is the third installment in the Nightmare on Elm Street franchise and stars Heather Langenkamp, Patricia Arquette, Lawrence Fishburne, Priscilla Pointer, Craig Wasson, and Robert Englund as Freddy Krueger.
Dream Warriors was theatrically released on February 27, 1987, and grossed $44.8 million domestically on a budget of over $4 million. It received mostly positive reviews from critics.
In 1987, a year after the events of the previous film, teenager Kristen Parker dreams she is being chased by a disfigured man wearing a bladed leather glove. He attacks her in her bathroom after she thinks she already woke up, making it look like she slit her wrist in the real world.
Believing Kristen to be suicidal, her mother admits her to Westin Hills Psychiatric Hospital, where she is placed under the care of Dr. Neil Gordon. At the hospital, Kristen fights against the orderlies who try to sedate her because she is afraid of falling asleep. The new intern therapist, Nancy Thompson, calms her down and earns her trust by reciting part of Freddy's nursery rhyme. Nancy is introduced to the rest of Dr. Gordon's patients: Phillip Anderson, a habitual sleepwalker; Roland Kincaid, a tough kid from the streets who is prone to violence; Jennifer Caulfield, a hopeful television actress prone to cigarette burns; Will Stanton, who uses a wheelchair because of a prior suicide attempt; Taryn White, a recovering drug addict; and Joey Crusel, the youngest, who is too traumatized to speak. One night, Kristen is attacked in her dreams by Freddy but she unwittingly pulls Nancy into her dream; this allows both of them to escape.
Kristen reveals that she has had the ability to pull people into her dreams since she was a little girl. Over the next two nights, Freddy throws Phillip off a roof and kills Jennifer by smashing her head into a television. In their next group session, Nancy reveals to the remaining patients that they are 'the last of the Elm Street kids,' the surviving children of the people who banded together and burned Krueger to death many years ago. Both Nancy and Neil encourage them to try group hypnosis so that they can experience a shared dream and discover their dream powers. In the dream, Joey wanders off and is captured by Freddy, leaving him comatose in the real world; Nancy and Neil are relieved of duty. Neil is told by a nun, Sister Mary Helena, that Freddy is the son of a young woman on the hospital staff who was accidentally locked in a room with hundreds of mental patients who raped her continually, and that the only way to stop him is to lay his bones to rest.
He and Nancy ask Nancy's father, officer Donald Thompson, where the bones are hidden, but he is uncooperative. Nancy rushes back to the hospital when she learns that Kristen has been sedated. Neil stays behind to convince Donald to help them. Nancy and the others again engage in group hypnosis to reunite with Kristen but are all separated by Freddy. Taryn and Will are killed by Freddy while Kristen, Nancy, and Kincaid find one another. The trio rescue Joey but are unable to defeat Freddy because he has become too powerful due to the souls he's absorbed. Freddy senses that his remains have been found. He takes possession of his own skeleton and kills Donald before incapacitating Neil. Freddy returns to attack the others but Joey uses his dream power voice to send him away. Donald tells Nancy that he is crossing over but he is revealed to be Freddy Nancy pushes him away before he can kill her.Freddy slaps Nancy who falls to the ground Freddy believing that Nancy is dead comes upon Kristen in order to kill her but Nancy is still alive and stabs him with her own glove, Neil still manages to recover and purifies Freddy's bones, Freddy is devoured by the light and finally dies. Despite this Nancy is alive, Kristen manages to wake everyone up and bring everyone back to the real world. In the finale, during the patients' funeral, Neil finds Amanda Krueger's tombstone and discovers that she and Sister Mary Helena are the same person. In the evening Neil goes to sleep with the Malaysian doll Nancy gave that night and the papier-mâché house built by Kristen nearby, and suddenly Kristen's house lights up from the inside, suggesting that Freddy is not completely defeated.