Dario Argento and Lamberto Bava followed up the success of DEMONS with, duh, DEMONS 2 in 1986, a direct sequel (a rarity in the realm of Italian horror) that follows the first film so closely it's practically a duplication (which is not such a rarity in the realm of Italian horror). And though it captures the first DEMONS' aura of stylized excess, with emphasis on the latter, it fails to include its sense of crowd-pleasing excitement.
Bava gets underway with a cheap fake scare (what appears to be a blood-spattered butcher is really a pastry chef with a mess of strawberry glaze) before rehashing the same set-up as before, this time switching the locale to an apartment building but keeping his characters the same personality-barren spear-carriers. TV is the vessel of evil in this one, as various tenants (including a debuting Asia Argento) watch a movie about demons; strangely, the sequel ignores the first film's ending, which implied a widespread demon infestation, yet the events of that movie are referenced in 2's film-within-a-film. Like DEMONS, this build-up is the best part, the highlight being teenage Sally (Coralina Cataldi-Tassoni) watching in horror as the on-screen demon emerges into reality through the television screen, a la VIDEODROME.
Despite the almost identical approach, DEMONS 2 disintegrates into unbearable tedium after its somewhat impressive set-up, with a handful of grody transformation scenes thrown in to relieve the boredom (oddly enough, the one special effect that gets the most screen time is the worst--a hilariously stupid-looking puppet that at least livens up the action with its sheer ridiculousness). In his attempt to recreate the success of his previous hit Bava not only replicates what worked before (again we're treated to a scene in which the demons scurry through the dark, their eyes aglow) but also what didn't--again leaving the central location to focus on a group of teenage degenerates, though instead of incorporating them into the action like the first time, Bava seems content to let them grind the movie to a halt. Nor does Bava seem interested in recreating the atmospheric use of lighting, opting to concentrate on gore and forced mayhem (but at least he kept a euro-cheese synth soundtrack).
Perhaps Bava and Argento were aware their sequel would have the tarnished reputation it would soon earn, since they don't aim for a third installment by ending 2 on a more upbeat note. Our heroes (a young married couple expecting their first child) are trapped in a television studio surrounded by monitors, each one featuring a demonized Tassoni rushing toward the screen. The husband smashes each one in turn as his wife gives birth, reversing the demons' intent by delivering something good and innocent into the world.
If you must see DEMONS 2, I highly recommend renting a DVD so you can bypass the tedium and enjoy the transformation sequences. There is a few interesting tidbits here, but for a more productive viewing experience you'll be better off sticking with the original.