I don't know much about the meaning of dreams, but I know its easy to get sucked into reocurring nightmares. All it takes is a seconds thought whilst dreaming to snowball it back to the same nightmare you experienced before. Then the more it happens the more you think about it, you get yourself stuck in a vicious circle.

You say it's a lucid dream? If it is then you are in complete control. You can stop the demon in its tracks just by saying it. If I were you I would do that and ask it what it wants, or why it wants the child. If lucid you can also reveal the childs face, and ask her what she represents.
Once these things are out in the open you often don't have the nightmare again and you ill hopefully have peace of mind too.