Wes Craven's New Nightmare (Wes Craven, 1994) (hereafter, New Nightmare) combines the familiarities of the previous entries in the A Nightmare on Elm Street series (hereafter, Elm Street—labelled as such to avoid any confusion) with a new element: home video. The recurring aspects of the series remain largely intact: iconic monster Freddy Krueger still attacks his victims in their dreams, existing in a liminal space between the dream world and reality. Other characters from earlier in the franchise also return, most notably the star of the original A Nightmare on Elm Street (Wes Craven, 1984) and A Nightmare on Elm Street 3: Dream Warriors (Chuck Russell, 1987), Heather Langenkamp. Co-star of the initial film and Dream Warriors John Saxon likewise appears in New Nightmare, as do producer Robert Shaye, actor Robert Englund (Freddy Krueger), and Craven himself. But whereas Langenkamp eventually “combines” with her screen persona of Nancy, a young woman attacked by Freddy (Englund plays both his movie-monster alter-ago and himself) earlier in the series, and Saxon experiences the same confusion as her erstwhile cinematic father, Shaye and Craven only play themselves in New Nightmare—both proposing an uncertainty about the role of horror as critically derided “popcorn” entertainment and its wider need to encompass and critique societal concerns. Most affected by the presence of violent videos in the film is Heather's son Dylan (Miko Hughes), who views his mother's performance in the initial film on the family's television, a scene that is deemed to be (or possibly an astute criticism of) the belief that children cannot separate “real” from fiction. The famous “moral crusader” Mary Whitehouse, for instance, would question “how do we will the film-makers with a sense of their own responsibility for the health and welfare not only of the whole of our society, but especially, for pity's sake, the welfare of the children who are the future?”

The scenes of Dylan watching A Nightmare on Elm Street on video illustrate what James M. Moran calls the “video-in-the-text” (VIT): cinematic uses of “home video as a textual signifier.” As numerous scholars have shown, video has particular textual significance within the horror genre, as evidenced by the many horror films which have used the technology as a central narrative aspect (perhaps most famously the Ring franchise) and the format's relationship with controversy (i.e. “video nasties,” its accessibility to children and so forth).