A Nightmare on Elm Street 4: The Dream Master (1988)

They never come out and say it, but it's implied that Freddy's grave is disturbed and that is what allows him to come back in part 4. He makes quick work of 2 of the 3 surviving Elm Street kids from the last movie, then he takes out Kristen, a role originated by Patricia Arquette, but here taken over by Teusday Knight. So Freddy wins, he does what he set out to do and has successfully killed all of the Elm Street children.

However, while dying Kristen reached out to her friend Alice Johnson (Lisa Wilcox) and bequeathed her 'Dream Master' powers. This is a mixed blessing, as whenever a friend makes a cameo appearance in one of Alice's dreams, Freddy cam now enter that persons dreams and kill them. So more teenagers die, but ultimately Alice is able to defeat Freddy, by completing the words of a nursery rhyme, thus freeing from Hell the souls (of all?) of Freddy's victims over the years. 

As is often the case with these movies this is better then I thought it would be. One of the things that most sets this series above and apart from much of its period competitors in the teen slasher genra, is that victims tend to be more memorable. Freddy kills kids in very personalized ways, in dreams that incorporate interests or quarks of his victims, so all these things have to set up in the story beforehand, so that they make sense and we feel invested. The 'Friday the 13th' victims all tend to blend together, on 'Elm Street' each victim gets their due, so part 4 gets **1/2