The Nightmare
Supernatural tales are central to human history, despite little to no science to make more than fiction of them. Often these stories seem to center on places of great unrest, violence, sadness, or other strong emotions. Poltergeists, ghosts, unexplained phenomenon... all of these are common to human folklore, despite evidence of their proof.
Whether it can be attributed to such stories, or the tampering of reality at the off shore labs, or the flux of multifaceted and even intra-dimensional beings, there existed such a... thing... on the island of shokushu. After countless students were raped, terrorized, and humiliated, the collective negative emotions of the island grew so strong that, either through some unexplained medium, or simply of it's own violation, a being was created. Little more than energy with a consciousness at first, it didn't have a name, nor a purpose, other than to haunt student's nightmares and feed off the energy released by their dark experiences on the island. As time grew, and it fed more and more, it seemed to gain intelligence, seeking understanding and context of its surroundings, instead of just subsisting like a basic life form.
The Android
At the offshore N.I.C.E. laboratories, entirely coincidentally, there came a call for an updated version of their reconnaissance and recovery drones, small units tasked with spying on students and, when they had either graduated or were else while called for, subduing and retrieving them.
A great deal of work was put into this next generation. With the latest alien technologies available to humans, often for the first time, the researchers created several models, often just to see if such ideas were viable. Many failed, and a few succeeded, though one stood out above the rest. RA, or Reconnaissance Automaton, was a light platform comprised of countless small nano-machines... appearing to the eye as an intelligent ball of quicksilver, able to reshape itself to suit any purpose, including mimicking humans, forming appendages, and even reproducing vocal patterns.
The scientists worked up a prototype model and saved their data, intent on running tests and pressing the model into full production.
ASURA
The nightmare, as it was referred to at that stage by students, had found the labs quite by accident, but occasionally visited. The experiments visited upon students there fed it nicely and it enjoyed the oddities of the place over the reliable but increasingly standard feeding grounds of the school. It had often watched the workers there, though with little interest. The researchers rarely fed it, save for the occasional pangs of lust for their student test subjects. As it's awareness grew, however, it began to take an interest in the machines of the place, trying to manipulate various ones. At first, it could little more than will a computer to type on its own, though eventually they were experience full power failures in specific labs, or watching restraining devices actively attack researchers... usually female researchers.
What happened next really would have been expected had anyone fully understood the cause of the malfunctions. The prototype RA unit deactivated in the middle of a test run one day, shutting down and splattering on the ground. As the researchers approached it, wondering what had caused the malfunction, it rebooted and floated into the air, simply floating out of the room past them. Any attempts to stop it were lazily avoided... the ball simply splitting apart, sliding under doors, into air ducts, and eventually simply disappearing into the walls.
While this would be only a minor setback, further electrical issues forced the lab into a full shutdown for an hour, and when power returned, all files on the RA unit seemed to have been completely erased from all of the data storage, everything from production notes, to test runs, to material composition. It was going to take years to synthesize another RA unit.
As time passed, the unit began being spotted on the island, occasionally even in the labs again. It appeared to have developed an artificial intelligence, though it's behavior defied even that. Much like the hidden residents of the island, it had begun to prey upon students, though in a manner beyond that of a machine. It seemed to take sick fascination with their emotional and biological responses, attempting to manipulate them, even down to a biological level, as one would program a computer.
The strangest event of all occurred when the RA unit set up an interview to apply as a resident of the island. The student worker in charge, though used to aliens and other inhuman creatures, didn't know what to make of it or it's story... nor what to call it, since it still didn't consider having a name to be important.
The labs were, of course, desperate to get their hands back on the device, though still hadn't invented effective countermeasures... having some luck with electromagnetic devices but never fully capturing the android. In agreement for allowing some tests to be run on it, it was granted residency and a hunting license (Which seemed to be a formality since it had been doing so illegally for a few months). The research team re-christened it "ASURA", or Anomalous SUpernatural Retrieval Automaton. It didn't care for the name, but did enjoy the imagery when associated with human mythology, so accepted the moniker.
Psychological Profile
Asura is difficult to categorize in terms of human personality traits, even though it was born of human emotions. It feeds of negative emotions, and seeks to instigate them in those around it. Because of this it can be extremely manipulative... feigning innocence and peace one moment and turning into a vicious sadist the next. It's not to be trusted, which the staff have occasionally discovered the hard way, though for the most part it seems to respect the hierarchy of power on the island, perhaps finding a mechanical comfort in the systemic approach.
Although it is a machine, its consciousness is largely developed from human emotions, and as such it's curious, even with its hunting. Often it will grow bored of simply taking human women, and will seek alternative approaches. Also, for reasons unknown (especially odd, considering that it was mostly formed of the emotions of women) it considers itself male despite not truly having any gender.
Abilities
Asura is capable of manipulating the nano-machines that make up its body in a number of ways, through it seems to be learning new ways to use them as well. Ideally, it was created to be a shape shifting unit, ideal for infiltration, prisoner capture and transport, and limited combat. Asura was able to adapt to those system quickly, and it's adept at those features... easily sliding under doors, between walls, ensnaring prey, or disguising its appearance as human. It can replicate human vocal patterns as well, though Asura itself doesn't always fully comprehend the human psyche, limiting this ability (More in weaknesses). It's capable of manipulating the density of any part of itself, thus effectively giving it skin, armor, or simply letting things pass through itself.
Asura was built with the island's temperate climate in mind and is thus waterproof and resistant to temperatures between -47 F and 212 F. Higher or lower temperatures will cause it to retreat or risk damage.
Asura's supernatural element enables it to feed off of, and thus read, human emotions. While this doesn't allow it to read a person's thoughts, it can sometimes use it to tell if a person is lying, faking, etc.
Finally, Asura displays a remarkable control over interfacing with mechanical and electrical systems. It must learn each system as it comes across it, but once it has invested a suitable amount of research into the machine, it can usually learn to control it at will. Doing this usually limits the movement of its normal platform, reducing it's maneuverability significantly.

Quick facts
Name: Asura

Type: Posessed Machine

Place of Birth: Shokushu Island

Gender: None, though it considers itself Male

Height: Varies

Weight: Varies, 500 lbs when fully formed and concentrated in an area

Skin Color: Varies, naturally metallic silver

Skin Texture: Varies, though naturally smooth, cold, and metallic.

Hair? If it desires, though none in its basic form

Body Build: Basic form is that of a perfect sphere, though it breaks this form in order to engage in combat or capture.

Number of Tentacles: It can technically spawn a great many tentacles, though each one detracts from its main body and the strength of its other tentacles. It can create approximately 10 without a noticeable drop in strength or durability.

Wings? if it chooses, though it hasn't mastered using them for flight yet.

Cock Size: Varies.

# of Cocks: See: Tentacles

Fighting Style: Adaptive; Asura uses its shape shifting abilities to surprise and confuse opponents, usually trying to ensnare and subdue them. It's not actually skilled in combat beyond the basic programming for capturing students. Against a trained warrior, it might not succeed, save for its durability.

Motivation: Survival/enjoyment. Asura subsists by feeding off of the negative and positive emotions exhibited in its victims as it manipulates them. While technically it could gain a great deal by killing them, it sees that as a waste of renewable resources and absolutely will not inflict lethal damage on any living being, unless its only means of survival is to do so.

Clothing: Asura can mimic clothing when shape shifting, so has no need for actual clothing.

Weaknesses: Asura doesn't fully comprehend the human psyche, or even their basic needs or desires at time, seeing life through the jaded lens of his formative emotions. It doesn't understand concepts like compassion, selflessness, or other good willed traits, as it was born from the opposite. As such, its human disguises, though visually perfect, are often flawed if forced to actually interact with humans for any length of time.
Asura is also vulnerable to sudden electrocution and intense magnetism. Magnets can disrupt the "neural" connections between its nano-machines. While it's capable of withstanding electricity to certain degrees due to its electronics interface abilities, if it isn't prepared for such an event, this can also disrupt its systems momentarily.
Extreme heat or cold will also cause permanent damage to its systems, though the temperatures at which it would be damaged would also be extremely hazardous for a human (See: Abilities).

Likes: Experimentation (as long as its not on Asura itself), women, wild hair colors, stability

Dislikes: lack of order, being treated as a machine

You forgot to put down number of tentacles in the profile skeleton. I had to search for it in the profile.

And looking this over... feels... kinda cookie cutter. Nothing wrong with it really... but nothing really stands out either.

Would have to agree with Red.

Change a few things around, and maybe try to come up with a little more in the uniqueness portion.

Or keep it this way with the change to the number of tentacles in the appropriate place.

As for the last portion on history, a quick search on Google for 'Define Demon' brings up this definition:

de·mon/ˈdēmən/
Noun:

An evil spirit or devil, esp. one thought to possess a person or act as a tormentor in hell.
A cruel, evil, or destructive person or thing.

Perhaps you can redo your history with this in mind and add a bit more of where he resides, what made him become what he is,etc..?

((Completely rewrote... everything. Hope this one is better!))

It looks better to me. Welcome to Shokushu! I hope you enjoy your time here.