Having watched the movie many times, I fell that it is not sequel, but a very good knockoff of the Universal horror films.
The story involves Armand Tesla (Bela Lugosi), a vampire who is brought back to life after the Luftwaffe bombs the cemetery where he was buried. Tesla had taken the life of many people in London at the turn of the century. He had a spike driven into his heart by Professor Walter Sanders and his female assistant, Lady Jane Ainsley. The professor's small daughter, Nicky, had been attacked by Tesla. When the doctor destroys Tesla, it also removes a spell that he put on a man named Andreas Orby, that turned him into Tesla's werewolf slave.
Volunteers cleaning up the cemetery after the Blitz remove the spike from Tesla's body, thinking it is debris. Tesla takes control of Andreas, who now works for Lady Jane, and turns him back into werewolf. Lady Jane ask Andreas to meet Dr. Hugo Bruckner, a scientist that has escaped a concentration camp and will be working for her. Tesla and Andreas kill Bruckner and Tesla assumes his identity. Dr. Bruckner is invited to an engagement party for Lady Jane's son John and Nicky. Tesla goes after Nicky again.
I will stop her because Return of the Vampire has a twist ending. In fact, an episode of Sanford & Son worked that into an episode. Fred and Grady start to watch the film and Grady tells Fred how the movie ends before it starts. Fred, in retaliation, dumps a bowl of potato chips on Grady's head.
Photos of Lugosi as Tesla have appeared in books and been misidentified as being Dracula. The werewolf makeup was reused by Columbia for the 1956 horror film called The Werewolf. This is also the first film to feature both a vampire and werewolf. You could probably say that this isn't the sequel to Dracula, but a forerunner to Twilight and Underworld. On second thought, let's not say that.
The reason I don't think it is a sequel is that it doesn't follow a storyline that is even close to the original story. Too many elements in the story (Werewolf, Tesla's book) seemed to suggest that this was not an attempt to make an original vampire movie and not a Dracula movie.
This film would be a great movie for kids (or anyone) to watch on Halloween. After all this has too monsters for the price of one.