Freddy Krueger returned in 1985's A Nightmare on Elm Street 2: Freddy's Revenge, a film once derided for its homoerotic subtext but is now lauded for it. Directed by Jack Sholder and written by David Chaskin with no involvement from franchise creator Wes Craven, aside from a few suggestions, the filmmaking feels cheaper and more TV sized but Robert Englund in the role of Freddy still makes an effectively threatening impression.
The homoerotic elements revolve around the film's main character, a guy named Jesse played by Mark Patton, who was a closeted homosexual at the time. Apparently he complained that the movie kind of outed him for years but has since kind of embraced it, even writing a sequel to the film from the point of view of his character. No-one ever suggests Jesse is gay in the film, the interpretation mainly comes from his physical interactions with a guy on his high school football team and with the coach, whom Jesse encounters at an S&M club.
Jesse's love interest, Lisa (Kim Myers), does feel more like a best friend than lover. She also looks identical to a young Meryl Streep, which is apparently why she was cast.
Freddy's scheme this time is to take possession of Jesse's body so he can massacre people in the real world. This, too, could be taken as an allegory for Jesse struggling with repressed urges.
It's more interesting to think of this movie as unintentionally homoerotic than as intentionally so. My own opinion is that the movie was probably intentionally homophobic. When Chaskin says in interviews that he wanted to address the homophobia he was perceiving in young men, I suspect the thinking was more like, "Guys are creeped out by gay shit, this will make the movie creepier." But the film does function well as a story about someone who can never face his own subconscious so the film's unhappy ending works better on a thematic level--because the movie ends with Jesse not acknowledging his own homosexuality. The consequences are brutal but, hey, it's a horror movie.