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[Spoilers] It turns out that the two little girls' grandmother is a witch of some sort, and she's really disappointed in her daughter for failing to produce a son for ritual sacrifice, so after Toby forces the littlest girl to tell her mom to go visit grandma, and Toby makes all the items in the kitchen rise up and then crash down when the mother turns back around, they all drive 8 hours from the Bay Area to Southern California.

After they arrive at Grandma's, they go to bed, only to hear a car pull up, and the boyfriend wakes up to the noise, finds the grandmother and a group of witches coming at him, locks the door, runs through the house, only to find his wife suspended off the ground at the top of the stairs, dead, killed off-screen, and she's thrown down at him, causing him to tumble with the body down the stairs in horror.

In the kitchen the boyfriend runs into invisible Toby, who knocks him down, and then bends him backwards breaking his spine and killing him.

The grandmother appears, calls to the two daughters, takes their hands, and the three of them walk off camera as Toby growls. The oldest daughter presumedly destined to become Toby's child bride, her baby sacrificed and her memory erased, as was mentioned earlier in the film, twice.

So now we've learned that Toby is a demon, worshiped or controlled by the witches, which is the exact same story as found in Anne Rice's "Mayfair Witches" chronicles, where a demon named "Lasher" haunts and aids all the girls in the Mayfair clan.

Finding out the demon is named Toby, and that the only reason he's around is because of witches, takes the edge off the entire series of films, the previous two films which had me sleeping with a light on. No longer could there be "something" in my attic despite its exact resemblance to the attic entrance in the first Paranormal Activity. No witches, no demons, no problem. [/Spoilers]

Nope, "House of Leaves" by Mark Z. Danielewski is what's giving me chills now as I walk down my hallway to the bathroom at night.

basically, the ghost that they have been "seeing" through out the movie starts to show itself more and ends up killing the mom and dad. the grandma and the ghost were apparently a part of some cult which was their reason for killing. it wasnt that scary, trust me. i found it boring atually