No, he is not a demon.
Dustin can immediately realized if his opponent is a demon if he sees one. But the one in front, is not a demon.
Dustin only feel one mindless human that has become a monster.
They look like a lizardman, but with the result of mutations between humans and monster lizards.
"Sir!" "Dustin!"
With the twins' notification, there are many lizardmen monsters coming out of the darkness. There are dozens of them and outnumbered Dustin's party.
That situation made Dustin thinks hard.
They just need to pass the last alley behind the lizardmen group to get out from the labyrinth. Of course, the lizardmen will not make it easy for them to pass.
But those lizardmen looks like will not be aggressive until they try to get pass them or maybe move to somewhere else. Since they are moveless when Dustin's party arrived.