Even Better Sequel: There are some fans who believe this, and consider it even better than the original. That fact that it's widely regarded as the best of the entries that Craven didn't direct helps.
Fridge Horror: The souls of the people Freddy kills gives him strength, now imagine all the deaths from 1, 2 and 3 up to that reveal. That's about 21 people he killed on screen and counting.
The fact that he collects their souls at all adds new levels of creepiness to all the scenes where little kids appear in his victims' dreams. Were they not just dream-imagery, but the same little kids he'd murdered when he was still alive, forever bound to do his bidding and lure others to their deaths?
During Kristen's first on-screen nightmare, as she's running down the hall carrying the little girl, it's pretty obvious she's actually carrying a doll or mannequin.
Freddy's stop-motion skeleton is a strong contender for the worst effect in the entire series. Not only is it horribly matted into the live-action footage, but the animation is worse than what you'd see in low-budget Sword & Sorcery flicks.
Squick: Joey is having a dream where he is making out with a hot nurse... who turns out to be Freddy in disguise. Sweet dreams, everyone. It was going to be even worse originally: Freddy's head was going to be on the naked nurse's body.
Surprisingly Improved Sequel: This film is considered a marked improvement over Freddy's Revenge, which, while not completely bad, deviated too much from the first film's plot.
They Wasted a Perfectly Good Plot: The whole "special powers in your dreams" thing never amounted to much. At best, characters just briefly delayed their deaths by bombarding Freddy with attacks that were just minor annoyances, and in the end its not the powers or teamwork that beat him, its Neil shoving his bones into a hole and attacking it with holy water and a crucifix.
Although the combination of powers and teamwork does allow several dreamers to save Joey and stay alive long enough for Neil to get the job done, giving this film's teens a better rate of survival than most entries in the franchise.
Kristen's real dream power was always her ability to draw others into her own dreams; the gymnastics were a secondary power. It's still better than Nancy, who doesn't get any dream powers.
The Woobie: Via Cerebus Retcon, Dream Warriors made all of Freddy's previous victims this (except Coach Schneider), with the reveal that Freddy absorbs his victims souls and internalizes them for power. This keeps them in a constant state of pain and anguish. Meaning Tina, Rod, Glen, and everybody else had never stopped suffering even after Freddy died.