In this film, Freddy is depicted much closer to what Wes Craven had originally intended for the character, much more menacing, much less comical, with an updated attire and appearance. However in 2015, before his death, he would admit he regretted changing his appearance and said: "If it ain't broke, don't fix it." Which was why he kept Ghostface's mask the same in every Scream movie.
The events in this film revolve around Heather Langenkamp having a stalker. In real life, she did have a stalker, and Wes Craven got her permission to weave it into the story.
Jsu Garcia (Rod from A Nightmare on Elm Street (1984)) and Tuesday Knight (Kristen from A Nightmare on Elm Street 4: The Dream Master (1988)) make appearances as themselves in the funeral scene. Director Wes Craven had intended to ask Johnny Depp (Glenn from the first film) as well, but he never worked up the courage to ask him. After the film's release, they ran into each other, and Craven asked Depp if he would have made an appearance in the movie; Depp said that he would have, and that Craven should have asked him.
The television show appearance was inspired by a real encounter. According to Wes Craven: "Robert Englund and I did an appearance together on public television in the San Francisco area. It was about whether this kind of movie was bad for children or not. There were parents in the audience and then kids. All the kids leaped to their feet and started chanting, 'Freddy! Freddy! Freddy!' I remember looking at the show host and the parents, and they all looked horrified."
In reality, Heather Langenkamp's real husband David LeRoy Anderson is a special effects man, as he is in the film.