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Grendel is a man-eating demon (never a good sign) that lives in the land of the Spear-Danes and attacks King Hrothgar's mead-hall, Heorot, every evening. The narrator of Beowulf claims that Grendel's motivation is hearing Hrothgar's bard sing songs about God's creation of the world, which rubs his demonic nature the wrong way.
Whatever the reason, every night Grendel slaughters more Danes and feeds on their corpses after tearing them limb from limb. Although he can't be harmed by the blade of any edged weapon, Grendel finally meets his match when the Geatish warrior Beowulf takes him on in a wrestling match.
The poet explains that Grendel and his mommy are the descendants of the Biblical Cain, which suggests not only that they are part of a larger religious or supernatural scheme of evil, but also that they are connected with one of the worst things possible in tribal culture— fratricide, or the killing of a brother:
Grendel was the name of this grim demon haunting the marches, marauding round the heath and the desolate fens; he had dwelt for a time in misery among the banished monsters, Cain's clan, whom the creator had outlawed and condemned as outcasts. For the killing of Abel the Eternal Lord had exacted a price: Cain got no good from committing that murder because the Almighty made him anathema and out of the curse of his exile there sprang ogres and elves and evil phantoms and the giants too who strove with God time and again until He gave them their reward. (102-114)
However, at other points in the poem, Grendel seems less like a Biblical figure and more like a ghost, a demon, or something else that belongs in a Halloween-themed horror movie:
So times were pleasant for the people there until finally one, a fiend out of hell, began to work his evil in the world. (99-101)
Critics also like to play with the idea that Grendel might represent something that isn't supernatural at all—a member of another tribe, an outcast, or a warrior who won't play by the rules. After all, the real problem with Grendel is not that he kills people. Pretty much everyone in this story kills people.
The problem with Grendel is that he seems to kill for fun and he won't pay the death-price: the treasure that he should give to the Danes to make reparations for the lives that he has taken. So, it's possible to see Grendel, not as a fantastic monster, but as a monstrous human warrior with a pathological love for violence.
Or, to spin it another way, you can read Grendel as a vilification of "the other," a demonic representation of someone outside the tribe. Of course, since he feeds on the corpses of his victims, that makes him a cannibal. But maybe that just adds to the chilling horror of it all.