A Nightmare on Elm Street

The game is a side-scrolling platform game in which the player fights his way through different parts of Elm Street (houses, junk yard, etc.). Players fight enemies such as snakes and bats outside of houses and ghosts and other creatures inside.

Gameplay consists of a sleep meter that goes down slowly as the player progresses through the level, or if the player stands still. The sleep meter also goes down when the player takes damage. When the sleep meter runs out, the player character falls asleep and the screen colors change to darker colors and the enemies change and become harder to defeat. Scattered throughout the game are dream tokens that allow the player to change into dream characters with special abilities. Players can boost their sleep meter by picking up cups of coffee scattered throughout buildings, and wake up by finding a boombox. If the player does not touch a boombox to wake up or reach the level boss within a certain time while asleep, the background music will change to "One, Two, Freddy's Coming For You" and soon after, Freddy will appear to fight the player.

Throughout the levels, players collect Freddy Krueger's bones to throw into a furnace at the end of the game. Before completing each level, players must face a boss. Bosses include a giant Freddy glove with a long chain arm, a chomping Freddy head on a long chain neck, a floating Freddy hand and head, a bat with a vampire head, a ghost with a Freddy head, and Freddy Krueger himself. A defeated boss leaves behind a key, which when touched transports the player character back onto Elm Street.

Controls vary between the teenager character and the dream characters in the game. For example, one of the dream characters has the ability to shoot projectiles and perform a higher jump