After the tease at the end of the last Friday the 13th movie we finally get the cross-over horror fans had been waiting for!
Freddy Krueger is trapped in Hell, it’s 2003 and 4 years after the events and time of the sixth film and due to the fact the teenage residents of his town of Springwood, Ohio have forgotten about him, rendering him powerless, he can no longer return to Springwood, because there’s no fear of him left in the entire town. He “can’t come back if nobody’s afraid,” so, under the guise of Jason Voorhees’ mother, Freddy manipulates Jason, who he’d been looking for over a period of time to do so, into killing the teenage residents of Springwood, hoping the mass fear will restore his powers. After all, residents of Springwood were terrorized by Freddy, not Jason, so obviously, every ounce of fear would be directed towards him, giving him more power than he’d ever hoped for. His plan works, but only to the extent of allowing his return.
Lori Campbell now lives with her widowed father at 1428 Elm Street. Her friends Kia, Gibb, Trey, and Blake, spend the night, and Jason kills Trey by stabbing him in the back, before folding him in half with the mattress. The gruesomeness of the murder and the fact it happened in bed cause police to speculate Freddy was responsible. Later, Blake has a nightmare about Freddy, and awakens to find his beheaded father sitting beside him before Jason appears and kills Blake as well. The next day, the police blame the murders on Blake, who they say committed suicide.
Lori’s ex-boyfriend Will Rollins and his friend Mark Davis, are patients at Westin Hills Psychiatric Hospital, forced to take Hypnocil to suppress their dreams. After seeing a news report on the murders, Mark devises a plan, and the two escape. He and Will return to Springwood, where Mark informs Lori and the others about Freddy. Mark later learns of the city’s plan to erase Freddy by making the population forget about him and realizes he may have ruined their plan. That night, Lori and the others attend a rave at a cornfield. A drunken Gibb believes she sees Trey and follows him to a silo, which turns out to be a dream trap set by Freddy. As Freddy is about to kill Gibb, Jason, who has arrived at the rave to slaughter partygoers, kills her in the real world. An enraged Freddy realizes Jason will not stop stealing his potential victims.
Linderman, a classmate who has a crush on Lori, and stoner Freeburg escape the rave unharmed along with Lori, and Kia. Lori confronts her father about her mother’s death and traps him in a lie. She and Will go to Mark’s house, only to find him being attacked Freddy who slashes his face with his bladed gloves. Deputy Stubbs suspects there is a copycat of Jason murderer, but his suspicions fall on deaf ears. He approaches Lori and her friends, who piece together Freddy’s plan. Learning of the Hypnocil, they decide to steal some from Westin Hills, but Freddy possesses Freeburg and disposes of the drugs. After electrocuting Stubbs, Jason is tranquilized by the Freddy-possessed Freeburg, whom Jason cuts in half before succumbing to the drugs.
The teens devise a plan to pull Freddy from the dream world and force the two killers to battle each other. They take the unconscious Jason to Crystal Lake; and should he defeat Freddy there, he’ll already be back home and will not come after the teens. Meanwhile, Freddy battles Jason in the dream world, and upon discovering Jason’s fear of water uses it to pull him into a nightmare of his drowning as a child. Lori enters the dream world to retrieve Freddy, saving Jason in the process. Enraged, Freddy attacks Lori, and reveals he was the one who killed her mother.
In the real world, Jason awakens and chases the others into a cabin. Jason pushes Linderman into a shelf bracket and he is mortally wounded. The cabin catches fire, and Lori’s hand is dragged through flames, causing her to wake up and pull Freddy from her dream into the real world. Jason begins to fight Freddy while the others escape, and throws Freddy through the roof of another cabin.
Linderman dies, and Lori, Will and Kia encounter Freddy. Kia taunts him, but Jason kills her by slamming her into a tree with his machete. As Lori and Will escape, the two begin their final battle. An attempt to ram a mine cart into Jason goes wrong and both of them are hit and land on the boardwalk. Lori and Will igniting propane tanks that blow Freddy and Jason into the lake. Freddy makes one final attempt to kill Lori and Will; however, Jason saves them by using Freddy’s own arm to impale him through the chest, before falling back into the lake. Lori decapitates Freddy while Jason sinks below the water.
Finally at peace with their past, Lori and Will leave Crystal Lake together. Later, Jason emerges from the lake holding Freddy’s severed head, which winks and laughs.