2 years after Joe Winko put a stop to the razor clawed Psychopath which stalked him in his sleep, Joe Winko now believes he is safe. However, Freddy Krueger has returned and traps Joe Winko on an island where things are not as they seem. Will Joe Winko be able to escape the clutches of Freddy Krueger once again? or will his soul be forever lost on the Island of Illusion?