What book drops from Demons?
The Demon Scythe is a rare spellbook that was released with the Terraria 1.0.5 patch. It has a roughly 2% chance of dropping from any slain demons.
So your find was quite rare! If you've not yet exited the game world, I'd suggest going back posthaste, as that's a great spell, and very worth a couple of deaths trying to get it!