Originally posted by Dr Will Hatch
Freddy has complete control over the Dream World. He's essentially a god while inside it. Manhattan gets turned into a bug.
Has Freddy ever turned anyone into a bug? Even though he theoretically can do anything, the level of reality manipulation shown wasn't as impressive as what Manhattan has done. What would happen if Manhattan disintegrates him?
He turned a girl into a cockroach during the fourth movie:
http://www.youtube.com/watch?v=_n4lVWFwFoM
There's nothing to disintegrate. Freddy isn't a physical being unless he's brought into the Real World(in which case he just heads back to the Dream World/Hell. The movies are pretty vague on this). Since Freddy has mystical/magic based powers, there's nothing for Jon to manipulate while he's in the Dream World. Oh, and lucid dreaming has no effect on Freddy whatsoever.