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Originally Posted by LuvablePsycho
I believe that's false? I think she killed him by taking his powers away saying "I'm not afraid" or "You don't exist" or something like that.
Of course as is the cliche in all slasher movies he was still alive in the very end and got her in a good dream she was having about her friends still being alive. But somehow she survived that encounter and lived on to reappear in the third movie where she got killed for good (because the survivors in slasher movies always get killed when they return for a sequel  ).
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That's correct! Freddy is not killed by a knife. Nancy believes fear gives Freddy power, so she turns her back to Freddy, he lunges at her but disintegrates. She walks out the front door, her mom and is sill alive, but maybe this is still a dream...