The game takes place in the neighborhood of Elm Street and is played from a side-scrolling perspective. The game's environment is inhabited by hostile characters (such as zombies, cats, dogs, skeletons, bats and minotaurs) that will attack the player character. Being attacked a certain number of times will cause the player to lose a life. Because the game takes place around midnight, certain areas are initially locked off from the player and require a key to be collected for later access. Within the individual buildings, the player must collect the bones scattered throughout the level before being able to leave. When all the bones are collected, a boss battle with Freddy will commence. Defeating Freddy will both allow the player to exit the area and earn the player a key that allows access to a new area.