Spawning help

You need something to control how many demons you want to spawn, and at what interval they will spawn.

Your current code will spawn a demon whenever the player is close enough, and the spawn happens every frame.

One of many ways to fix this

 var Player : Transform;
 var Range : int;
 var prefab : GameObject;
 
 var spawnCount : int = 3;            //How many to be spawn
 var spawnInterval : float = 2.0;     //wait this much of time to spawn new demon
 private var _lastspawnTime : float;  //when the last spawn happen
 
 function Start () {
     _lastspawnTime = -spawnInterval;
 }
     
 function Update () {
     transform.LookAt(Player);
 
     if(Vector3.Distance(transform.position,Player.position) <= Range){
         if( _lastspawnTime < Time.time && spawnCount > 0 ) {
            Instantiate(prefab, transform.position, transform.rotation);
             _lastspawnTime = Time.time + spawnInterval;
             spawnCount--;
         }
     }
 }

There are other ways to do it, but I wouldn't write them down here.