The producers of Silent Night, Deadly Night (1984) wanted director Lee Harry to re-cut the first film and insert one or two new scenes with Eric Freeman playing a mental patient, to make the story in the original film appear to be nothing more than the ravings of an asylum inmate. Screenwriters Lee Harry, Joseph H. Earle, Dennis Patterson, and Lawrence Appelbaum wrote short vignettes involving the patient's youth, as he killed several people, and eventually it became this sequel. There wasn't enough material for a full-length film, so numerous flashback sequences were added. The film still ran short, so almost ten minutes of closing credits were added, showing the full cast and crew of this film and its predecessor.
The movie received unanimously poor reviews upon release due to the excessive use of footage from Silent Night, Deadly Night (1984). The entire first half of the movie, more than half if you exclude the credits as being part of the movie, are nothing more than constant clips from the first movie with brief shots or audio commentary by the character Ricky talking to a psychiatrist about his brother's actions and experiences as a child and later teenage murderer. Over the years however the film has gained a cult following, mainly due to its unintentional campiness, over-the-top performances, and poor screenplay.
In 2004, the creators of the film attempted to contact Eric Freeman so he could be included in the audio commentary for the DVD, but were unable to find him. He would finally appear on the 2018 Scream Factory Blu-ray release commentary.
Eric Freeman frequently received conflicting direction from director Lee Harry and co-writer Joseph H. Earle during filming. Freeman had wanted to play Ricky as more of a cold and malevolent killer, but Harry envisioned Ricky as more a wisecracking killer along the lines of Freddy Krueger, while Earle encouraged Freeman to be as over-the-top as possible in his acting.
Lee Harry: the patron the theater loudmouth talks to (the mustachioed man to the left of him). He also provides the voice of the commentator when Mother Superior watches the Christmas parade.