[Metathron]

Meh, I'd say forget about the previous suggestions concerning fire resistance. Just don't take units that deal fire damage, such as Red and Black dragons.

Do you have level 3 Distortion Magic? Hopefully, you do, and you'll have leveled Magic Shackles to level 3. Demons are basically walkers/melee fighters who have some really nasty special abilities, mostly the Demoness' Infernal Exchange (teleporting one of your vulnerable units to the midst of enemy ranks) and the Imps and Scoffer Imps' fireballs; these are all shut down when you cast MS level 3. For a limited time of course.

So, my advice to you is, get Elves and Hunters and shoot the demons down with a combo of Magic Shackles and Slow, then engage them with Sprites and Lake fairies, preferably while your hero is wearing the artifact Anga's Ruby which makes she-fighters overpowered (in my opinion). Finally, you could fill the last slot with, say, dryads, and put those (scoffer) imps to sleep using lullaby, then in the next round cast a spell that raises the elves' initiative, then summon some thorns, etc.

Of course, the above is just my ideal combination (not really with the dryads, though, usually I will have Emerald Green Dragons), there are lots of other possibilities and strategies. Good luck!