Close Encounters of the Third Kind (1977), written and directed by Steven Spielberg, tells the story of Roy Neary (Richard Dreyfuss), an everyday blue collar worker in Indiana, whose life changes after an encounter with an UFO. When developing the character Joyce (Winona Ryder), the Duffer Brothers (Matt Duffer and Ross Duffer) "talked a lot about Richard Dreyfuss in Close Encounters, because for much of the show, Winona is entirely on her own and to the outside world, she seems absolutely bonkers." In 'Holly, Jolly', Joyce tips over the edge and chooses to fully embrace the supernatural happenings in her house as reality, mirroring Roy's own character arc.
This episode takes place from November 8 to November 9, 1983.
When Eleven (Millie Bobby Brown) turns on the TV, a portion of Ronald Reagan's October 27, 1983 speech regarding events in Lebanon and Grenada can be heard.
This is the first episode of the season, and of the entire series, to feature scenes set within the Upside Down.
Early on, there is a picture of Tom Cruise on the wall in Nancy's (Natalia Dyer) room. Later on the mood music playing is very similar to that from Risky Business (1983), which starred Cruise.