Freddy is back, and his power has grown so much that he has rendered Springfield childless, and all the adults of that town are suffering some kind of mass psychosis.
So that is what Freddy has done. What is his plan going forward? To use the power of his child, who was taken from him back when it was discovered he was a child murderer, to breach into other towns. This works because every town has an Elm Street, as Freddy dramatically tells us, though he doesn't really get into why that matters or how having a kid to help out changes the rules set in the previous movies.
But it's okay, because this is an excellent entry in the series so no matter how stupid and nonsensical the premise is I love it. This movie is barely a horror movie. It's like a live action Warner Brothers cartoon (watch for the part where Freddy pushes a bed of nails into place so a falling kid will land right on them) and there were several scenes where I actually chuckled.
Not is all wonderful, however, in the land of Freddy's Dead. The dialog is embarrassing and nearly every character is absolutely detestable. They argue and bicker like old people constantly. They couldn't die fast enough!
I really don't have a lot to say about this movie. It's not nearly as good a movie as Freddy's Revenge, but it's hilarious and a ton of fun, which is more than I can say for the first and fifth movies.