from what i understand, CoC2 happens in a different world then CoC1.
The Champion from CoC1 leaves their world to enter the world of Mareth via the portal. They then go through the game (good path i think) and defeat the Demons.
In the very last moments of that defeat, as the Champion is striking the final blow to the final boss (can't remember her name), Kass escapes Mareth and enters a THIRD world, one that is not Mareth OR the one that the original Champion came from.
CoC2 takes place in that third world.
I'm pretty sure Kass was the only one to escape Mareth, and any other demons were imps she sired / birthed, or mutated mortals from this current world, but then i remembered her Dragon daughter who takes up residence in the Wayfort, so i think she has some kind of access back to Mareth from time to time.