Daemon's Court is a dark and unsettling dungeon, home to undead creatures. You'll face Zombies, which are slow but can inflict 'Poison', and Ghosts, which are immune to physical attacks unless affected by 'Holy' magic or a Focus Attack. If you don't have Holy, a Clavat's Focus Attack is your best bet against Ghosts. The dungeon layout is fairly straightforward, but the enemies can be challenging. Look for 'Dark Matter' and 'Spirit Shards' as crafting materials. The boss of Daemon's Court is the Iron Giant. This is a tougher version of the enemies you encountered earlier. He has high defense and powerful melee attacks. His weak point is his legs; attacking them enough will stun him, allowing for free hits. Thunder magic is effective against him. Dodge his slow but devastating swings. After defeating the Iron Giant, collect the Myrrh drop and prepare to return to your village.
