What REALLY Happened ****spoilers****
The dad was a nutjob (probably had a psychotic break when he saw the "angel" under the car). He's killing people because the voices are telling him to. The younger son, being younger and more gullible (after all kids believe the fairytales their parents tell the about a god, angels, santa claus, and the easter rabbit), claims he sees the demons. The older son, not so gullible, of course sees nothing. Having been dragged into dad's insanity and seeing the horrors off him murdering people (and maybe inheriting mental illness from dad), both sons lose touch with reality. One believes he can see demons and that's why he kills, the other being an abused child also breaks with reality and kills, too.
I liked the movie though.
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