While adults in Springwood at the time were convinced that the dreams of Freddy were harmless, Nancy became convinced that they were dangerous and devised plans to defeat Freddy. When she noticed that she was able to pull Freddy's hat out of a dream and into reality, she decided to try and pull Freddy himself out of a dream to kill him. While this plan seemed to work at first, Freddy was able to survive being burned, murdering Nancy's mother. Realizing that either she was still dreaming, or that Freddy had imposed dream-like rules on reality, Nancy changed tactics by turning her back on Freddy and overcoming her fear. This led to Freddy losing his power and disappearing, unable to harm Nancy. Despite this, Freddy was not completely defeated, and continued to take the lives of children and occasionally parents.
In 1985, Jessie Walsh, now living in 1428 Elm Street was presented with Nancy's diary, which contained a detailed description of Nancy's struggle against Freddy.
Nancy's whereabouts during and after those events are unknown until 1987 when she arrived at Westin Hills Mental Institution near the Springwood area. Acting as an intern, Nancy began counseling teenagers in the same situation she once found herself in, the remaining descendants of Freddy Krueger's killers, all being tormented by Freddy's potentially lethal nightmares. Using controversial hypnosis techniques and at one point prescribing the experimental medication Hypnocil, Nancy was eventually suspended from her duties. Acting against hospital orders, she continued to coach the children and battled Freddy with them in a collective dream-state. She was murdered by Freddy, via a finger-blade stab wound, while defending the children.
In 1994, Heather Langencamp, the actress who portrayed Nancy Thompson, was targeted by Freddy Krueger, who had briefly started to emerge from the realm of films and into the real world. Heather eventually defeated Freddy by effectively playing Nancy once again.
Nancy was played in A Nightmare on Elm Street and A Nightmare on Elm Street 3 by Heather Langencamp. Roony Mara played a derivative character, renamed Nancy Holbrook, in A Nightmare on Elm Street (2010)