Demons are a species of creature in Crystal Story II. The only known demon to appear in the game is Kaz. He does mention a thing about there being other demons, yet none other has been seen.
The Orcracle has mentioned the Dargon as "a terrible race of Demons" in-game, making the players guess that Kaz cares for Orrora enough to turn his hand on one of his kind if this is true.
Demons are also very powerful, and without the proper equipment, the players don't stand a chance.