(at around 10 mins) The shirt Taryn is wearing in the beginning has the cover art of Dokken's 1984 album, 'Tooth And Nail'. 'Tooth And Nail' contains 'Into The Fire', a track that can be heard on the radio in some versions of the film.
Ken Sagoes stated in an interview he really didn't want to audition for the role of Kincaid, but his agent talked him into going. On the day of the audition he walked in heavy rain to catch a bus to the location. He showed up completely drenched and had to sit and wait for a few hours due to the auditions running late. When it was his turn, director Chuck Russell told him, "Do whatever you want to do". Sagoes was so frustrated and mad about the whole ordeal that he yelled "FUCK YOU!", and then proceeded to scream and curse out Russell. Russell immediately hired him.
For the dream sequence in which a Dick Cavett interview is interrupted by Freddy Krueger, Sally Kellerman was originally in the script as the guest but Cavett was then allowed to pick the person he'd be interviewing. He picked Zsa Zsa Gabor because he thought she was the dumbest person he'd ever met in his life, and he'd never have her on his show in real life. So, if there was one person he'd want to see killed by Freddy it would be her.
The original premise of the film involved Freddy invading the real world and haunting the actors and crew responsible for the "Nightmare on Elm Street" films. This idea was rejected by the studio, though Wes Craven later used it for New Nightmare (1994).
On the VHS release, the music video for Dokken's "Dream Warriors" appeared after the credits. The video contains many scenes from the movie and ends when the band vanquishes Freddy, causing him to wake up from his "nightmare," and ask, "Who were those guys?"
Robert Englund admits that he knew Patricia Arquette would go on to be a big star one day. He also explains how all of the guys on the set were head over heels in love with her. Between takes some of them would even go to Robert Englund to get his advice on whether or not he thought they had a chance with her and should ask her out.
(at around 29 mins) When the clay puppet face turns into Freddy's, special-effects man Doug Beswick used stop-motion animation. Filming began with a clay Freddy face that was made plainer in each frame. The result was then run backwards, and that is what appears in the final cut of the film.
(at around 51 mins) For the "sexy nurse" scene, the set was flipped so that Rodney Eastman was actually standing up when he appears to be strapped to the bed. He had to be spread eagled for so long that he actually passed out. He compared the experience to a crucifixion.
The original "Freddy Snake" unintentionally came out looking too phallic. The crew only had one hour to film the scene so they didn't have enough time to paint it. So, it was covered in a green goo substance to overcome the "pinkish hue." The scene involving the "Freddy Snake" attempting to swallow Kristen was also filmed backwards and then played in reverse due to the gums on the puppet being too flexible and were folding over themselves.
According to Wes Craven, the idea for the mental health facility treating the Dream Warriors was not just some riff on One Flew Over the Cuckoo's Nest (1975) but instead inspired by real life establishments, "At that time there was kind of a movement of such places that even advertised on television, 'Send us your troubled child and we'll make them okay.' And, essentially, they were like prisons, or insane asylums.
Chuck Russell was making his directorial debut with Dream Warriors, but the script he and Frank Darabont delivered called for a $20 million budget to pull off the effects even though they only had $4.5 million. The result was an incredibly tense set, not a particularly ideal setting for Patricia Arquette to make her film debut. On her first day of filming, the production was already so behind they didn't get to her scenes until 4 AM by which point she had forgotten her lines! It took 52 takes of her feebly making her way through it before they simply fed her the lines via cue cards behind the camera. Arquette has stated it wasn't a pleasant experience for her, while Russell said he may have pushed her too hard.
(at around 15 mins) Early in the film, when Nancy meets the teenage patients, Phillip says "welcome to the snake pit." "Snake pit" is a slang term for a mental health facility, and was a common slang term throughout most of the twentieth century.
In the original script, one of the Warriors dreams up a giant Transformers-style robot to fight Freddy. The sequence even made it into the storyboards stage, but budgetary constraints made filming it impossible.
Kristen comes across a classic nightmarish image of a roasted pig on a table, and then it comes to life and growls at her. They actually roasted a pig, let it spoil, and prop guys puppeted it from beneath. The poor guy who was actually behind the camera, cinematographer Roy H. Wagner, claims the pig's stench was so overwhelming he can still smell it to this day.
Freddy was supposed to be born at the beginning of the film in a ranch-style house, which was supposed to be the place where his victims wound up. Also, Nancy and her father were supposed to burn it down, but Freddy's influence on it wouldn't allow that to happen.
FX creator Mark Shostrom created a desiccated "little girl corpse" which Kristen would discover she was holding, but it was decided that the item was too grotesque. A miniature skeleton was used instead.
The bar where Nancy and Dr. Gordon meet Nancy's Father is called "Little Nemo's." "Little Nemo in Slumberland" is the name of a comic strip by Winsor McCay about the adventures of a child in the land of dreams.
Dick Cavett and Zsa Zsa Gabor are both on screen for thirty seconds. In the advance release posters, only Dick Cavett was credited. By the time the film was release, both Gabor and Cavett's named appeared on the 1-sheet posters.
Director Chuck Russell stated in a interview that mirror sequence was very difficult to do. He stated that it was before CGI so that "had to get really inventive". They were literally manipulating Mylar in front of the camera to get the shot done.
Even though Dream Warriors was rated M15+ in other states of Australia, it was banned in Queensland by the then Bjelke-Petersen government due to its drug content. In 1990 the Queensland Film Board of Review was abolished by the then Premier Wayne Goss and the film was no longer banned.
The trivia items below may give away important plot points.
at around 40 mins) Robert Englund improvised quite a few of Freddy Krueger's one-liners, but the best-known example happened in Dream Warriors, in a scene where Freddy emerged from a television set and killed a girl by smashing her head into it. For this scene, his line in the script was "This is it Jennifer, your big break on TV!". Robert Englund said this line for the first two takes, but on the third take, when director Chuck Russell went for an alternate angled shot, Robert Englund changed it to "Welcome to Prime Time, bitch!". Director Chuck Russell couldn't decide which version to use, so he edited the two together. The different camera angle made it easy to edit the two lines together, and it became probably Freddy's defining one-liner.
The script by Wes Craven was darker and contained more graphic language. Kristen had a friend named Becky who was killed by Freddy before the events of the movie and Nancy meets in a dream before being written out. Also all the characters were being drawn to the institution from all over the country. Kincaid could fly, Joey had superstrength, Taryn could become invisible, Will had another name and was the dream wizard. Kristen pulled people into dreams. Will had another name and had try to commit suicide because he left his brother alone in a pool then drowned. Freddy used this memory to get to him and Taryn's dead grandmother to kill her. Nancy was a patient. Phillip was killed by sleepwalking into traffic and getting hit by an ambulance. Joey creates the nightmare house and gives it to Kristen. Joey is seduced by a girl he crushed on in high school and then killed. Phillip and Jennifer's ghost told Nancy where to find Freddy's glove to kill him. Nancy's father was blinded and a patient in the sanatorium. Also Freddy takes Neil's image but Nancy sees through it and turns the blade on Freddy but is still gutted.
The scene in which Neil Gordon (Craig Wasson) is thrown into the grave and partially buried by the skeleton of Freddy is a tribute to Body Double (1984), in which Wasson's character is similarly buried alive.
The scene where Freddy's skeleton throws Craig Wasson's character, Neil Gordon, into the grave and starts to bury him alive is a definite nod to one of Craig Wasson's earlier film characters - Jake Scully in the 1984 film Body Double (1984) where the finale has Wasson's character starting to be buried alive.
Nancy's death was in Wes Craven's original Dream Warriors screenplay. Although much of the finished film had nothing to do with his script, he was responsible for Nancy's death on anyone else: He created her in the first Elm Street, and he's the one who killed her in Elm Street 3.