An in-name only sequel, actually a retitling of a made-for-TV film, by director Lamberto Bava which owes nothing to the earlier Demon films. This time with a plot about a family who rents an old villa which may, or may not, have something nasty lurking in the cellar.
A respected horror writer, Cheryl (Virginia Bryant) and her family have hired out an old Villa in the italian countryside for a few weeks holiday, whilst she works on her new novel. However, the bulding closely resembles a castle from her childhood nightmares, which was inhabited by a demon-like ogre.
Needless to say, shortly after they arrive, members of staff at the villa start to go missing. Dead bodies pop up in the flooded section of the basement, then mysteriously disappear again. Orchid flowers are left strewn all over the place, when nobody was around. The baby sitter disappears for no reason and her long lost childhood teddy bear turns up in the castle.
Cheryl believes that the Ogre from her nightmares is in the castle and turning the story of her latest book into reality, but her Husband Tom (Paolo Malco) doesn't believe a word of it. Until it finally pops up at the end, only to be dispensed with by Cheryl, who runs over it in the family's 4x4 pickup.
Not to be confused with Umberto Lenzi's "Black Demons" (AKA Black Zombies) or Michael Soavi's "The Church" which have also been released as "Demons 3" in some territories, I was initially very dissapointed when first viewing the film, as I had expected another action packed "Demons" film, not an unrelated cash-in, which was virtually gore free. However, after rewatching it several years later, I have warmed to it somewhat and is actually quite an effective Supernatural thriller. Although it is kind of slow and the ending will make you wonder if anything in this movie happened at all.
I'd say it's worth a watch, but view it on its own merits and try to ignore the "Demons 3" addition to the title.