I always took it more that Freddy actually survived and went back to the dream world again (which was sort of hinted at the end of the previous film with the house lighting up). So just to mess with Kincaid, he made Kincaid think that a dog peeing on the spot where Freddy had been buried resurrected him.
It's like people dont watch the endings of Elm Street movies or just completey block them out. Freddy was still alive after Dream Warriors as you see with the house lighting up. He was just waiting for the opportune time to use Kristin's power to get to non Elm Street Kids
LOL thx – y'know though, it's plays for a laff, but dog urine really is the anti-holy water!
There is a long historical association between dogs/hounds and the antichrist and the unholy, as well as there being an obvious case for water and urine as resonating respectively with divinity and impurity, where the latter has been used many times in art as emblematic of sin or blasphemy. See for instance, the famous photograph by Andres Serrano, "Piss Christ". It may seem like a silly way to bring Freddy back but it's really nicely grim! I always figured they knew what they were doing with this choice.
Wow I had never heard that before. Pretty interesting stuff. I had heard about how the devil/anti-Christ does like to use the inverse of holy things to mock God so I guess it does make sense.