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The biggest reason I've found that people denounce this film, including Wes Craven, is because it takes Freddy out of the nightmares and puts him in the real world. The first film made you think Nancy had pulled Freddy out of the dream, only to show that she was still having a nightmare in the end. The dream sequences and kills in Nightmare 2 are also not as memorable as the original.
The homoerotic elements, while initially meant to be subtext, are very apparent and even the crew of Nightmare 2 look back and laugh about how blind they were to them. However, I don't think this really contributes to the overall dislike of the film, I think it has more to do with it being inferior to the original ( and the subsequent 2 films that came after ) than anything else.
I'm glad that it's finding its audience and is now much better regarded than it used to be, I never thought it was bad personally, but I don't think it can be denied that it comes off as more of a silly dark comedy than a straight up horror film. The coach's death alone is hilarious, and when you add on the infamous " dance " scene, exploding bird, and BAD demon dogs in the end sequence, it goes from silly to gold lol.
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