So times were pleasant for the people there until finally one, a fiend out of hell, began to work his evil in the world. 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. (99-107)
Grendel is much like a creature out of a horror movie or a Stephen King novel – a demonic, hellish fiend, embodying all that is evil.
Then a powerful demon, a prowler through the dark, nursed a hard grievance. It harrowed him to hear the din of the loud banquet every day in the hall, the harp being struck and the clear song of a skilled poet telling with mastery of man's beginnings. (86-91)
The first adversary in Beowulf is no mere man, but a supernatural demon, angered by the very mention of God's creation. Notice that the supernatural elements in Beowulf are intermingled with the religious ones. Grendel is an ogre-like creature, but also a demon with a part (albeit a negative one) to play in a Christianized world.
All were endangered; young and old were hunted down by that dark death-shadow who lurked and swooped in the long nights on the misty moors; nobody knows where these reavers from hell roam on their errands. (159-163)
Grendel's rampages seem more sinister than regular murders because of his uncanny ability to come and go unseen in the night.
"Time and again, foul things attacked me, lurking and stalking, but I lashed out, gave as good as I got with my sword. My flesh was not for feasting on, there would be no monsters gnawing and gloating over their banquet at the bottom of the sea. Instead, in the morning, mangled and sleeping the sleep of the sword, they slopped and floated like the ocean's leavings." (559-567)
Beowulf's swimming contest with Breca is made more impressive by the addition of dozens of writhing sea-monsters, turning this straightforward athletic contest into an adventure worthy of being included in an epic.
When they joined the struggle there was something they could not have known at the time, that no blade on earth, no blacksmith's art could ever damage their demon opponent. He had conjured the harm from the cutting edge of every weapon. (799-804)
Grendel, the narrator tells us, is magically impervious to all edged weapons, like swords. Of course, the Geats and Danes don't know this, but Beowulf's seemingly foolish decision to fight Grendel hand-to-hand turns out to be a brilliant strategy after we know about this spell.
"I have heard it said by my people in hall, counsellors who live in the upland country, that they have seen two such creatures prowling the moors, huge marauders from some other world. One of these things, as far as anyone ever can discern, looks like a woman; the other, warped in the shape of a man, moves beyond the pale bigger than any man, an unnatural birth called Grendel by country people in former days. They are fatherless creatures and their whole ancestry is hidden in a past of demons and ghosts. (1345-1357)
Earlier in Beowulf, the narrator explained that Grendel and his mother are the descendants of Cain, connected to an Old Testament story and a Christian way of understanding the world. However, in this passage they seem more like Halloween creatures – "demons and ghosts."
The water was infested with all kinds of reptiles. There were writhing sea-dragons and monsters slouching on slopes by the cliff, serpents and wild things such as those that often surface at dawn to roam the sail-road and doom the voyage. (1425-1430)
It's interesting that the sea monsters that infest the lake where Grendel's mother lives are just thrown in for atmosphere. Beowulf doesn't really have to fight them and they don't pose a very important threat in the context of the plot. They do, however, make things feel more fantastic.
Meanwhile the sword began to wilt into gory icicles, to slather and thaw. It was a wonderful thing, the way it all melted as ice melts when the Father eases the fetters off the frost and unravels the water-ropes. He who wields power over time and tide: He is the true Lord. (1605-1611)
Grendel's mother's blood melts the sword that Beowulf uses to decapitate her. The destruction of a sword seems nothing less than "a wonderful thing" to the narrator, who puts a lot of trust in the sword and in the battle-prowess of warriors.
That huge cache, gold inherited from an ancient race, was under a spell – which meant no one was ever permitted to enter the ring-hall unless God Himself, mankind's Keeper, True King of Triumphs, allowed some person pleasing to Him – and in His eyes worthy – to open the hoard. (3051-3057)
Even a dragon's treasure hoard seems to be under a spell to keep it from falling into the wrong hands. Once again, pagan and Christian elements blend; the "spell" that keeps men from reaching the gold is associated with God "allowing" someone to "open the hoard."