The Briton, making his first appearance since December, caught his Canadian opponent with a right upper cut and although Demers beat the count, the referee soon waved the fight off.
DeGale, who is now 15-1 with 10 inside the distance, remains highly ranked by the WBC and has turned his attentions to a title shot.
"I wasn't messing around," he said. "I got in there and he felt too slow and I could see the shots coming so I opened up on him.
"The finishing shot was a nice uppercut. We've been working on the inside and I'm learning in the gym every day.
"Give me a couple more fights to keep the momentum going and I'm willing to fight anyone. I will be a world champion by the end of this year."