The Demon Wars is a unique skill book that "details countless wars - each more gruesome than the one before." It is also a quest item for By the Book if Kenneth was chosen as the Battle Tower's skill trainer. It can be found in the possession of Kali at Kali's Flying Fortress Headquarters, south of the Orobas Fjords. She must be killed to obtain it. Reading this book rewards 3 skill points, and results in the following dialogue:
"This book contains the memoirs of humans and Demons alike, all of them veterans of a dozen wars. In the hands of a skilled expert, "The Demon Wars" can become the ultimate warlord's manual and is therefore of great value."