The "demon" in the title story refers to the mythical tengu, who guard the secrets of swordsmanship. A swordsman travels to Mt. Kurama, famous for being inhabited by tengu, and in a series of conversations he learns about mushin (no-mind), strategy, the transformation of chi, and how the path of the sword leads to the understanding of life itself.
The author, Issai Chozanshi, had a deep understanding of Taoism, Buddhism, Confucianism, and Shinto, as well as insight into the central role of chi in the universe--points that are succinctly explained in William Scott Wilson's fine introduction and extensive endnotes. This is essential reading for anyone who wants to truly understand the philosophical underpinnings of martial arts, and how these principles relate to our existence.