There are two main types of demons: the demons inside of us, and those outside of us.
The demons inside of us are our psychological defects, also called I's, sins, aggregates, samskaras, etc., such as pride, lust, envy, anger, greed, gluttony, laziness, etc. Any being with these psychological characteristics (whether visible or submerged in the mind) is demonic; that is, having the characteristics of demons.
The demons outside of us are also of two types: those who are aware they are demons, who are awakened in evil and for evil, and those who are not aware they are demons, who are asleep.
"In this day and age, there are many perverse people who are severed from their Innermost. These are crowds who follow a terribly tenebrous devolution in the abyss. All these devolving people have horns on their foreheads. Some of them are demons endowed with sparkling intellects, who boast of being prophets and avatars. Thus, shrouded within fine manners and exquisite culture, they often establish spiritual schools. Yes, within the privileged ranks of aristocracy are thousands of learned, educated, and intellectual people, who even follow mystical traditions, yet they are already totally severed from their Innermost. These are souls who have horns on their foreheads; they are tenebrous demons. These types of souls possess only the four bodies of sin (physical, ethereal, astral, and mental bodies). Unfortunately, their triune immortal Spirit is no longer linked within them. They live in the physical world, yet internally they dwell within the abyss." - Samael Aun Weor, The Major Mysteries
"Millions of women and distinguished gentlemen, who are presently living on this world, do not have their Innermost (Spirit), and are therefore perverse demons, even though they still have physical bodies. The human being becomes a demon when the psychological "I" attains absolute control of the four bodies of sin (physical, ethereal, astral and mental), then the Innermost (the Spirit) withdraws from him... When somebody who has a physical body enters into the abyss, the Antakarana, which is the thread that connects the fourth and fifth human principles, is broken. Those inferior quaternaries which are separated from the spiritual triad become demons. When a soul is very perverse, the Spirit abandons that soul. These people without Spirit are demons. Therefore, when the Spirit definitively abandons the body, the person passes through death, even though he may still be physically alive. Then, the name of this Spirit figures in the book of the deceased. Presently, there are many people who already do not have the Spirit (the Innermost). Whosoever loses the Innermost becomes a demon, and every demon belongs to the abyss." - Samael Aun Weor, The Aquarian Message