Elm Street 3 is one of my favorite Nightmare sequels (except for 2 and 6, I like pretty much all of them, actually). It's got the return of Nacy (heroine from the first one), plus Patricia Arquette and Larry Fishburne (it just cracks me up that he's not Laurence Fishburne in this one, but I guess you can't really stand on ceremony in a horror sequel).
This is also the Elm Street where Freddy starts talking more. (In the first two, he's mostly silent and creepy but from three on, he's pretty chatty.)