techically, she does, the first imps you fight, are implied to be the offspring of this scene, if you meant that
I mean, it really doesn't seem so to me... I just did this sequence of events (champ got vag-fucked in intro), and this is the scene description I got entering the Frostwood for the first time (emphasis mine):
(While Kasyrra's rambling, you notice that her belly is rather large — gravid, even — and her thighs are stained with dark juices.
Has she just given birth!? "Ah, I'm sorry you missed the fun," the demoness taunts.
"I've been sampling the sexual delicacies of your land while you dithered about. How many imps I've spawned already... these are just the most recent, the fruit of some poor elf's loins. They cum so easily from just one finger in the ass!")
That's the exact same, bog-standard description you get if you never had sex with Kas at all in the prologue, or if you had any form of sex that doesn't involve sticking
your dick in
her pussy. So I fail to see where the 'they're implied to be yours' bit comes in.
... Which honestly is rather disappointing, all things considered. The mere image of getting fucked by a demon, then waking up a week later only to find oneself massively, unnaturally pregnant, only to give birth to psycho little monsters mere moments later, is a striking one---like 'Alien' with more horny and less body-horror---and would make for a GREAT jumping-off point for certain types of champ, depending on how one wished to roleplay (either 'is horrified', leading to becoming a pure-pure paladin of demon-smiting, or 'is weirdly aroused', leading to a gradual---or rapid---downward spiral into corruption and hedonistic excess).