Demian begins through the narration of the main character, Emil Sinclair, concerning his youth as of 1904 or 1905. The entire novel depicts ten years' activity, which takes us up to his involvement as a German soldier in World War I, at which point Sinclair is twenty years old. It is important for the reader to keep in mind constantly that it is not the child Sinclair telling the story, but a mature adult reflecting back upon various stages of his development, trying to present an understandable analysis of what was occurring to him both internally and externally. Although it is obvious that the major key of the novel is individual and deals with the internal development of one character, the outcome presents a minor key which transcends the individual aspect to arrive at a universal meaning.
At the age of ten, young Emil Sinclair begins to become aware of a division in the world into light and dark, and good and evil. Critics have traced the source of Hesse's choice for his protagonist's name to Isaac von Sinclair, who was a friend of Holderlin. Others have pointed out, additionally, that the name is of further importance symbolically because it is an Anglo-French compound with the first syllable "sin" meaning dark, and the last syllable "clair" meaning light. Thus the awareness of a dichotomized world by a young boy who is going to come to grips with it and whose name represents it is an appropriate beginning for the novel.
To young Emil Sinclair, the world of light is epitomized by his home, his family, and their customs and traditions. The dark world borders and even overlaps his world with servant girls, ghost stories, and scandals. Young Sinclair can imagine the Devil lurking on a neighborhood corner but can never recognize his presence within his household. The recognition and awe of the potential evils waiting on the outside make Emil appreciative of the security and warmth of his home. In his self-perspective at this time, Sinclair identifies with the world of the righteous because he is the child of "saintly" parents. Recognizing the overlap, however, he is aware that he also lives in the darker world, although he is a stranger to it.
In viewing his ambition to become a part of the good and righteous world on his own part, he senses that he will have to journey through the dark world and its temptations in order to obtain success. Emil reflects upon stories he has heard of sons who have gone astray and who have eventually returned home into the fold with much happiness. A great deal of Hesse's writing deals, to varying degrees, with such themes as the Prodigal Son. In reading and hearing such stories, however, Sinclair is most fascinated with the parts dealing with the hero's involvement with evil. Hence, without consciously being aware of it, the young boy has sensed something about the forbidden, yet enticing, aspects of evil.
As the son of a rather prosperous family, Sinclair attends the elite Latin school, but it is his involvement with a public school student, the drunken tailor's son, Franz Kromer, that is the beginning of Sinclair's journey.
In an attempt to impress the older ruffian, Kromer, with his bravado, Sinclair invents a lie about his heroic part in the theft of some apples, and thus he makes himself susceptible to blackmail by Kromer. The imagined theft of "apples" is what ultimately leads to his downfall and his exclusion from the "garden." Sinclair frequently refers to the domain of his parents by this term. Hence, very early in the narrative, Hesse employs a biblical allusion and sets a religious tenor for the novel. Both the symbolism and tone will remain quite religious throughout the remainder of the novel. This aspect of the book is one of the devices employed by Hesse to build tension; when contrasted with the Nietzschean philosophy expressed, seemingly irreconcilable paradoxes result. The addition of the psychological aspect to the religious and Nietzschean aspects further complicates the novel. Indeed, the psychological factor leads into areas considered taboo by much of society. These factors have caused at least one of Hesse's critics to avoid discussing Demian because he feels such discussion might cause too much controversy. This, however, is not the case if the novel is analyzed logically and carefully.
Further description of the villainous young Kromer reveals that he has a habit of spitting through a space between his two front teeth which gives him a somewhat serpent-like aspect. Kromer's threat of exposure forces Emil into a more serious, and this time an actual, crime. In order to pay Kromer the amount of blackmail money which he demands, Emil steals, first, from his own piggy bank and, then, from wherever he can, especially when he finds money lying around the house.
Contemplating his plight, Sinclair feels that he has now made a covenant with Satan and that his life is ruined. Debating whether or not to confess his predicament to his father and take the resulting punishment, as he has at times in the past, Sinclair decides that he must solve this problem by himself. His deep guilt feelings effect a break in his family ties. Sinclair withdraws from the mainstream of family activity. Occasionally reprimanded by his father for trivial matters, Sinclair both transfers his father's anger to his greater wrong-doing and, at the same time, feels contempt toward his father because of his ignorance of Emil's real crime. This latter feeling, which is a new experience for Emil, is the beginning of his quest for independence.
Sinclair begins to feel like an outsider, something evil within his parent's realm of righteousness, certain that God's grace is no longer with him. Yet he is also intuitively aware that the end of his former life will lead to the beginning of a new one. Sinclair also realizes that in the process of rebirth, he must also sever the cord binding him to his mother, an act which is much more difficult for him than leaving his father.
Because of his fear of meeting with Kromer, Sinclair frequently becomes conveniently ill and hides within the safe confines of his house.
When Sinclair does finally face Kromer, without the full payment required to buy his silence, Kromer continues his bullying tactics and, at times, even forces Emil to become his slave, performing menial tasks. From this point on, the terrifying shrillness of Kromer's whistle summons Sinclair to his evil master for further nameless tortures. When at home, Emil remains withdrawn from his parents and sisters, whom he cannot imagine guilty of any type of wrongdoing. It is emphasized that his alienation is strongest toward his father, to whom he is completely cold. By the conclusion of the first chapter, Emil Sinclair has been forced to leave the "garden" of his childhood innocence and to venture precariously into the realm of the dark world.