Both sides eventually settled out of court, but as a result, vinyl pressings of the album He's the DJ, I'm the Rapper contain a disclaimer sticker that says, "[This song] is not part of the soundtrack...and is not authorized, licensed, or affiliated with the Nightmare on Elm Street films."

Will Smith starts the song off by telling a story about Freddy Krueger, whom he addresses as "Fred" and describes closely resembling the film character but without using his full name.

The story starts off on a Saturday evening when Smith, DJ Jazzy Jeff, and Ready Rock C go on a triple date with three girls where they catch a movie.

After Smith gets home he lies down for the night and supposedly wakes up sometime after 12:30 from the unusually hot temperature from the heater which has melted his alarm clock.

However, the entire album could not fit onto compact discs of the time, so for the CD release, many tracks were shortened; the single version "A Nightmare on My Street" was used in place of the original.