The Mystery Magical Special first aired in 1986 and would continue to run on Nickelodeon for years afterwards. I do not think I caught it the year it premiered, but they brought it out every year around Halloween and I was a big Marc Summers fan, so I started watching it.
The special involves Marc and some kids in a spooky mansion with some magicians and dealing with some creepy stuff including this bizarre demon. In the end it is all revealed to be a magicians trick and group departs.
Look for a cameo from Gomez Addams (John Astin) at the start of special and pictured above.