They are the souls of evil men transmuted by God into a malignant form as a punishment. The children of the Watchers and the daughters of Adam. These are the Grigori, who, with their prince Satanail, rejected the holy Lord. Demons Are the Disembodied Spirits of the Giants. They are not Devils.
Devils are fallen angels.
Chris Ward, D. Min. They are half breeds, angelic hybrids, the Titans. The word in Greek titanos means greys. When fallen angels shape-shift into a from of human being they can have intercourse but not without some aberrant genetic changes. The union of these beasts with humans produced children that were different in many ways.