Freddy Krueger returns once again to terrorize the dreams of the remaining Dream Warriors, as well as those of a young woman who may be able to defeat him for good.

Charlie Cox is a divorced writer who lives in Los Angeles. Charlie and his daughter Joleen are on their way home from a cross country vacation when they run out of gas in Banco, Nevada; a small town located in a remote part of the desert. It's one day before Jolene's 14th birthday. Charlie and Joleen check a nearby gas station owned by a Vietnam war veteran named Duckett, but Duckett doesn't have any gas, so they head to the local supermarket to find a phone. Sheriff Bill Childers is in the store and he advises them to go to the trailer park to ask for gas. Joleen spots the body of the store's owner, Ferrell Hogus, in a pool of blood. The Sheriff states that the murderer is most likely a drifter. The man and daughter check into the nearby Palomino Guest Ranch and Trailer Park, which is owned by a hostile woman named Agnes Reed. Whilst her father uses the phone, Joleen speaks to Agnes's rebellious teenage son, Jimmy Reed, who she briefly came into contact with earlier at the gas station. A chemistry between the two teenagers is implied. Joleen later meets a sandy-haired boy named Pinky Sears, who is sent away by an angry Jimmy. That night, while Agnes is taking a bath after an argument with Jimmy, she is killed when a hand reaches in through her bathroom window and pushes a small fan into the bathtub water, electrocuting her. Charlie and Joleen also meet their neighbors, fellow travelers Louise and Amy. By now it is obvious that a killer is terrorizing Banco. the next day, when Jimmy tries to rape Joleen, she is rescued by Pinky, who Jimmy attempts to drown before Joleen pushes him and runs off with Pinky. Joleen's diary is later stolen by the killer. Soon after this, Joleen and her dad agree to car pool with Louise and Amy to leave the ranch, but the murderer, having become obsessed with Joleen, blows up the car with Amy in it to prevent them. When Jimmy tries to rob Duckett's gas station, he is arrested and accused of being the serial killer, but the killer turns out to be one of the people Joleen least expected.

An amnesiac awakens in an asylum for the criminally insane and must find answers as those around him die one by one.

A look at the making of the film Troll 2 (1990) and its journey from being crowned the "worst film of all time" to a cherished cult classic.