A Nightmare on Elm Street is a famous slasher film franchise about the exploits of a deranged child murderer named Fred Krueger, who was burned alive by the vengeful parents of his victims, only to come back and kill their other children from beyond the grave where they can't help them: in their dreams.
Nancy Thompson is the main protagonist of Parts 1, 3: Dream Warriors, and 7: New Nightmare. Played by Heather Langenkamp, Thompson was the first person to defeat Fred Krueger, making him more vengeful towards her.
"Beautiful Dream" Theory
Beginning in A Nightmare on Elm Street Part 3: Dream Warriors, Nancy Thompson, the protagonist of the first film, returns as a dream researcher to help a girl named Kirsten, who is being terrorised by Krueger. Kirsten is special because she can bring other people into her dreams, a different consiousness. At the end of the film, Nancy is killed by Krueger, and Krueger is killed after holy water is splashed on his corpse. Kirsten cradles Nancy's body and reassures her that she will put her into a "beautiful dream", forever.
The question is: how far do Kirsten's powers go? And is it possible that she was being serious when she spoke about her "beautiful dream"? Most fans interpret this as comforting the dying Nancy, but others see this as literal, as Heather Langenkamp would return in Wes Craven's New Nightmare, as herself. Some fans assume that New Nightmare was the "beautiful dream" since she was famous and Krueger was imaginary in this film, until he returned as a demon and started wreaking havoc on her life. It does make sense that she was reincarnated in the dream as Heather Langenkamp, able to live a peaceful life despite being dead. The film Jacob's Ladder did a similar thing: as it is revealed at the ending that all the events of the film were merely a dying hallucination of the main character. Similar plot devices in other films do support the idea that the "Beautiful Dream" theory is indeed possible, despite being unlikely.
Few people regard this as Craven's intent, however the canon does make more sense, as the story flows smoother as a result of this theory, and also explains what was up with New Nightmare.
Reasons Why It's Logical
- It explains why Langenkamp reappeared in the metafilm New Nightmare.
- It explains why Krueger started terrorizing Langenkamp there, because her dream was too beautiful.
- It explains what Kirsten meant by "beautiful dream".
- In New Nightmare, there is a scene where Langenkamp says "screw your pass!". This is a line from the first film. Some view this as a simple reference, while others see this as literal. "Heather Langenkamp" was repeating her life as "Nancy Thompson" in the dream.