Demon Morph is a transformation that Daniel undergoes in Painkiller. It occurs once Daniel collects 66 souls from killed enemies, and manifests as Daniel's vision turning gray and misty, demonic screeching filling his ears, and enemies or their dead bodies appearing as glowing red. This vision also flashes for a fraction of a second upon Daniel collecting the 64th and 65th soul, warning him that the transformation is coming.
It lasts about twenty seconds, and while Daniel is in Demon Morph mode, he is invulnerable to all attacks, and can kill any enemy by aiming at him and "firing" once. Rather than ammunition, though, he is using the demonic power associated with the Morph.
Because of the highly useful nature of Demon Morph, it is recommended that the player time his collecting souls so the Morph occurs while he is in the beginning or the middle of a battle rather than fighting isolated enemies or mopping up at the end of a battle. In addition to the flashes received indicating the transformation is coming, the player can also watch the counter in the top right portion of the screen (the one in the top left counts all enemies killed on the level).
Demon Morph is often called "berserk mode" from the Berserker powerup in Doom 3. Both modes are very similar, involving a temporary period of distorted vision, screeching in the ears, invulnerability, and an ability to kill enemies very easily. In fact, the only major difference is that Painkiller's Demon Morph has a ranged attack using demonic power, whereas Doom 3's Berserk mode has a melee attack done with the player's fists.
The visual distortion and auditory hallucinations also somewhat resemble those from putting on the One Ring in the Peter Jackson Lord of the Rings movies.