How do you even get past the first level though? I never figured it out, threw the game aside and went back to playing Battletoads.
Are you talking about Nightmare on Elm Street?
Well, the first three houses are randomly generated. Sometimes the first house will be the third one from your starting point, or between the two houses, or where you start at. You enter, you collect bones, keep yourself awake (unless you want to use your collected classes like Acrobat, Shadow Warrior, or Necromancer), collect more bones face Freddy (or Freddy's parts) at the end of the level.
It's difficult, but not impossible. You just have to keep trying. If you ever come across the game again, give it another shot.
FACT: Nightmare on Elm Street was developed by Rare, the makers of Battletoads.