This is much of a parody as well as a pastiche. It hones in on what Freddy was supposed to be, although both the original and this one tend to stick to the concepts - if it wasn't for the first one, we wouldn't see this refreshing, different angle represented by the actors themselves. This is not so much as what Nightmare On Elm Street could have been, or a retelling, because even though it is a sequel, it manages to contain itself within a twisty script that plays on being written just to bring Freddy back and ends up being a film within a film where the narrative is being used by the characters instead.
It represents its first kill in the series through the possession of Heather's son Dylan (playing on the second's storyline, with the competent belief that these incidents happened due to this film's storyline enabling them to happen outside the dream-world) with the idea of the fourth's storyline that enables Dylan to fall asleep and have Julie brutalised by Freddy. It is an extremely interesting set-up that takes inspiration from its own series and twisting it so a film is able to exist within a film for its best interests, while the script that is used by Craven within it is wrapped up by the end of the film, choosing to exorcise the demon. What is made to think to be unnecessary, aids it in its own purpose which helped Craven in getting what he finally wanted instead of asking for another sequel.
It also makes it a whole lot more fun to see the actors playing themselves, although Freddy is chosen to have a lot less screen time than what would be considered fulfilling in a role like this. The last scene was perfectly done, but Heather should have had less screen time to enable us to get a good look at what people were up against.
It may be descending into self-parody, but no film deliberately seeks out to be a horror with these CGI and one-liners. However, Freddy has become more of a caricature, reminiscent of particularly the later sequels where his grim humour and personality remained sadistic but still something of a brave embodiment of making fun of his victims while he tortured and killed them.
This film chooses to make fun of itself, where self-parody isn't such a bad thing. We can take note of Freddy's remarks on the previous sequels where despite how he was killed, he still managed to find a way back, giving an exploitative yet logical explanation on the creative decisions in bringing him back to life several times (note that this is known as 'the final nightmare', so it's kind of an apt choice to put that in there). There is a point where he says in his famously darkly sarcastic tone that 'kids these days, they haven't got any respect', which is exactly the time one of the characters decides to hit back against her dead abusive father (who is actually Freddy). Not only does she survive the film, but the point is made where Freddy is annoyed that she isn't a weak slasher-type victim where she doesn't choose to defend herself. She's already gone through enough torment and so manages to not devolve as a character.
One of the deaths are quite cringe worthy - making the decision to give one of the characters a trait of smoking so he manages to have a Freddy-induced psychedelic dream that ends up putting him inside a videogame where he gets brutalised through a power glove that Freddy himself is using. This is complete with Looney Tunes/Mario Bros style music, enough to make you wonder what you are actually watching. It's a cringe inducing scene, especially because in real life he is hopping like a madman around an abandoned house, although funnily enough it doesn't detract from the rest of the film ('What do you call that, rational?').
It certainly is a strange sequel to end on besides the subtle parody/pastiche that came 3 years later in the form of New Nightmare. It's gotten more obvious as the years went by, and what became of it soon found the eccentricity worked to turn itself into a self-parody that it was there to enjoy rather than end up accidentally becoming stupidly unusual.
With the first Nightmare, it is only implied about what happened to Freddy when he was released on a technicality, so it doesn't get bogged down by backstory (Halloween chooses to see the pure evil and psychopathic behaviour of Michael Myers with a suitable backstory without turning into an offensive stereotypical cookie cutter antagonist), but as we go throughout the series we have a chance that fortunately takes us away before we descend into complete mayhem. We may be deviating from the original as so far as having one teenager left over from the havoc that he caused all the way from the beginning, but we receive adequate links over the decision to make every place have an Elm Street.
His backstory gets more interesting the older he gets, and although it is polarising to see him try to gain sympathy for his bloody deeds, we can tend to understand that when we see it from his daughter's point of view on how psychopathic he managed to be (some of the best lines originate from when he tells her not to tell of the things he'd done and when we see him post-burn the interaction between her as an adult and him proves pretty worthwhile). It's a chance to see him beforehand where we saw him destroy the lives and well-being from the information already given to us, with the dramatic irony of seeing him playing with his young daughter in the garden with the knowledge of what happened previously. The point being that it was 'A Nightmare On Elm Street' with the sudden idea to make everywhere Freddy's future playground, yet we still have a history that doesn't heavily deviate from the concept of the original.
Freddy's form, although a shadow of his dark, humorously sadistic self, is still sent up as a funny, dark self-parody that gets to create more chaos in his own playground. His background is more fulfilling than once realised, and it is important to regard this film in the series as something that needed to be added rather than taken away. No one would create a horror film deliberately that would be soon turned on its head by taking a turn with an interesting story and put together with overly-creative ideas that made the eccentricity of A Nightmare On Elm Street what it soon turned out to be.
The weird and campy seemed to be upped another level in this fourth installment, but although Freddy was strangely surreal he fortunately didn't become a caricature. The first half maintained the logical set-up that it went with but it admittedly became a campy nightmare. As much as I did prefer the Dream Warriors version of Freddy, and the fact that it had the taste of an 80's glam rock music video, the scenes towards the end involving a one-on-one fight with him left it on a good note with his jokey personality (which, to be fair, I liked that in him).
Lacking the atmosphere of the granddad of slashers - Halloween - it lets on its tropes more than it needs to. On a similar point, the teenagers drop dead quite quickly and it only really gets interesting at the second half.
With a do-good message in its centre and a light hearted comedic tone, it is soon revealed as to what it really is - a fantastical journey to find yourself in a sudden pointlessness, a 'that's it?' after-taste and shifting scenes. It is more deserved if the man finds something else other than his cute co-worker on top of that.