The title of the third chapter is once again a biblical allusion, which, once again, Demian will treat as a myth and interpret as he pleases. In this recurring practice, Demian reflects Hesse's own views. Hesse, as he stated in 1930, believed that biblical myths were useless unless they could be interpreted personally for the individual in his own time.
At this point, young Sinclair is just beginning to awaken sexually and is undergoing the agony of adolescence in coming to terms with those thoughts and desires deemed forbidden by society. As with most people at this point in their lives, Sinclair makes a further withdrawal from his family. Sinclair observes that leaving childhood and developing into adulthood is, for many people, the only time in their lives that they experience dying and rebirth, hinting that this should be a continual process if the individual is to attain the highest degree of fulfillment. Most individuals stop evolving, cling to their pasts, and dream of a lost state of innocence. It is implied that only superior beings — such as Demian-continue to evolve and seek their destiny. Again, obvious Nietzschean influence is observable.
While Franz Kromer has vanished from Sinclair's life, Demian will, from this point on, always be a part of his life. Reflecting back upon occasions when he has carefully observed Demian's uniqueness, Sinclair presents the first detailed physical description of his mentor.
Demian is described as having an ethereal appearance. His face contains characteristics of manliness, boyishness, and femininity. It is old looking, young looking, and still ageless. He is handsome yet different. Sinclair observes that trees or animals could look this way but not people. Demian is extremely different from other people.
Several years pass before Sinclair again has close contact with Demian. Emil, now about fourteen years old, finds himself in the same confirmation class as Demian. Once again the lesson being taught is about Cain and Abel. Influenced by a fleeting glance from Demian, Sinclair this time is critical of the traditional interpretation given by the pastor. Soon Demian manages to move closer to Sinclair until he is sitting beside him. He accomplishes this feat even though the students have been alphabetically arranged by the pastor. The new bond established between the two boys enables Sinclair to understand fully just how remarkably different Demian is. He appears to control others with his thoughts. Even the pastor is subject to Demian's will, which he mysteriously manifests through his eyes. Demian also explains to Emil that his thought-reading and predictions of the actions of others are simply the product of intense observation.
Using the example of the night moth, Demian refutes the pastor's claim of free will. According to Demian, our will is free, and we can obtain a particular goal only if the goal we have set is right and necessary to our individual needs and development. If the goal meets these criteria, we are capable of its attainment. Demian explains that he was able to accomplish changing his seat even though the pastor's will was in opposition to his by utilization of this principle.
Further development of Sinclair's independence is effected by Demian through the biblical account of Golgotha. Demian admires the unrepentant thief as a man of character and strength. The thief had been evil all his life and chose not to repent, but rather to follow his destiny in accord with the way he had lived. Demian believes that this thief might even have been a descendant of Cain and labels the other thief a "sniveling convert."
At this time, it is advisable to reflect upon all of Demian's characteristics as described up to this point. The first reference to him was in the words of Sinclair: "my salvation." Indeed, Demian did save Emil from the serpent-like Kromer after Sinclair had caused his own expulsion from the "garden." Demian also seems to be almost magical, performing such "miracles" as thought-reading and displaying uncanny knowledge of others, both physically and mentally. Subject of much suspicion, Demian is an unusual outsider who is, however, held in respect. He instructs Sinclair through parables and disputes things with his teachers. His difference is made even more apparent because of the unexplained aura which surrounds him. Later he will, in a sense, have a band of disciples. His physiognomy is, at the same time, masculine and feminine, possibly displaying the sensitive gentility frequently present in portraits of Christ. Even the chapter title could also refer as well as to Demian, who (figuratively) has been placed between two thieves, namely Sinclair and Kromer. There can be no doubt that Demian has been established as, and functions as, a Christ figure.
Yet, paradoxically, the essence of his words has been anything but Christ-like. Ironically, Demian is the mouthpiece for the "superman" doctrines of Nietzsche. To Hesse, this is not at all incongruous, as will be demonstrated later.
Demian's next attack on orthodox Christianity hits Sinclair harder and more personally than any of his previous tirades. Demian sees a serious weakness in any religion which arbitrarily sets up an attitude of attributing all that is good to God and all that is evil to Satan when, in effect, God created the entire world and therefore deserves total responsibility. To make his argument more persuasive to Emil, Demian refers to God as the father of all life and then to the religious and societal repression of all sexual matters. The clergy frequently refers to such matters as being the work of the devil. Demian's suggestion is that all of life should be affirmed and the arbitrary, illogical, and artificial dichotomy dispensed with.
Sinclair is now suddenly aware that his secret agony concerning the dark and light worlds is not uniquely his, as he previously thought, but rather a problem common to all humanity. Demian also informs Sinclair that now that he has begun to think critically, he will no longer be able to repress all of his darker urgings. Frustrated by all of this sudden illumination, Sinclair becomes defiant, asserting his belief that merely because evil exists as a fact of life, one cannot justify participation in it. Demian's concluding Nietzschean response is that Sinclair must realize the relativity of morality, citing the ancient Greek celebration of sexuality as a contrast to the Christian repression of it. Therefore, it is for each person to decide what is permitted and forbidden for him, and then to stand by his own beliefs. It is possible here to observe some influence of Dostoevsky. Hesse was very familiar with his works, and this train of thought parallels Raskolnikov's thoughts in Crime and Punishment.
Sinclair's next reminiscence of Demian is again set in their confirmation class. Gazing at Demian, he observes his friend in a trance-like state resembling death, his face like a mask of stone. Demian is obviously deep within himself in the process of meditation. Meditation is a recurrent step in the search for self in all of Hesse's subsequent novels from Siddhartha to The Glass Bead Game (Magister Ludi). Shortly after this scene, Sinclair makes unsuccessful attempts at emulating Demian. Meditation remains an art which Sinclair will need to master on his journey to his own interior.
Emil's childhood is now gone and his confirmation completed. It is determined that following his vacation, he will be sent away from home to further his education at a boarding school. He soon finds himself alone, in a strange situation, in a strange town, without the crutches of his family, with whom he has long been severing ties, and without Demian.