A Dream Demon is a malevolent demonic entity, vaguely resembling floating, skeletal snakes in appearance. Their primary goal being breaking down the barriers between the Dream World and the real world. The Dream Demons seek out depraved and evil humans to act as their agents in spreading chaos. The Dream Demon animatronics were created by Jim Fowler and manipulated by a team consisting of him, John Agnew, Bret Alexander, Adam DeFelice, Jennifer Howard and F. Lee Stone.When prolific child murderer Freddy Krueger was burned to death by a vengeful mob of Springwood citizens for getting away with the crimes he had committed, the Dream Demons appeared before him and granted him the ability to enter and kill in dreams, provided he had ample fear to use as a power source. Whenever a would-be victim defeated Freddy the Dream Demons would resurrect him to continue his work. When Freddy's long-lost daughter Doctor Maggie Burroughs forcibly enters her father's mind the Dream Demons appear to taunt her before she finds the portion of her father's mind containing his memories. When Maggie forcibly drags her father into the real world and blows him up with a pipe bomb the Dream Demons are violently expelled from their servant's remains.
After Freddy's death, it is assumed the Dream Demon's return to him as he uses his dream manipulating powers to ressurect Jason Voorhees (disguised as Jason's mother Pamela) and send him to Elm Street to kill the children and spread the fear to allow him to return.
The Dream Demon's last notable appearance is at the end of the comic Freddy vs. Jason vs. Ash: Nightmare Warriors, where the demons emerge from the Necronomicon Ex-Mortis - Book of the Dead - and accuse Freddy of lying to them, saying they gave him power and now they have nothing because of Freddy using the power of the book to gain reality-altering abilities. Accusing him of being 'not worthy', the trio of demons strip Freddy of both his Necronomicon abilities and his Dream Manipulation powers - reverting him to his original, unburnt form despite his pleas to them. Now mortal, Freddy is killed for good as Ash Williams blasts him with his shotgun - with Freddy's lifeless body been sucked into the Necronomicon's vortex.
It is unbeknown if Freddy would come back, as a time-displaced Agent Wesley Carter - who was sucked into the Necronomicon's vortex - arrived in 1964 after the police had gained the search warrant for Freddy. Finding it in front of him and remembering how it was never signed properly, signs it impulsively. Thus, history is changed as Freddy is convicted of the murders rather than been set free.