This is when the series gets super slick.

The first movie is a low-budget serious attempt at a horror movie.

By the fourth one, it was obviously bigger budget and had moved towards Freddy being a fun character rather than a scary one.

I agree though that the transition started in the third. It was still dark, and Freddy was still meant to be scary villain rather than that cool villain. But, you could see in the third the budget had got bigger with some of the kills. The puppet scene, and the TV kill scene looked were more high budget than anything in the first. (Though, that's not to say the kills in the original all sucked. Tina's death was awesome, and the Glen one was pretty cool. Just that they had to accomplish those with imaginative effects rather than budget.)

Also worth noting was that more humour was injected into the third. "I said where's the f***-ing bourbon?" and "Who gives a f*** what you think?" were both hilarious, but perhaps wouldn't have been made in the original. It felt Freddy was still dark, but had begun to transition a bit into having more personality.

By the fourth, he almost felt like a Rock Star.