As the element of empathy, Sunset can feel what others are feeling, she is especially in tuned with the emotions of her friends. but during the Anon-A-Miss incident Sunset is exposed to negative emotions and when her friends abandoned her after accusing her of being Anon-A-Miss, Sunset feels all their negative emotions towards her, sadness, betrayal and anger. With her friends betraying the element they stand for, Sunset's own element starts to become corrupted, and as the days pass and she slowly starts to change. First is being slightly more aggressive than usual, then she notices red patches on her skin as well as a slight pain on her back, until finally she wakes up after a nightmare to her skin becoming red like she had in her demon form, her ears becoming pointed and her teeth are razer sharp. With no idea what's causing this, Sunset writes to Twilight for help, but it may already be too late.

Sunset turning to a demon again kinda been done except it was after she was brutally attacked.
This seem to be slower, if she becoming more aggressive, can see her fight back a few times.

Maybe put a student in her/his place.

I like the idea and it should definitely but put into place.

This intrigues me.

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She'll put more than one student in their place and as she fights back she soon starts to like it.

when!

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When I'm finished with my current story.

Great!

A better idea for this would be for her Element to be so corrupted by negative emotions that Sunset herself actually starts to produce an aura that increases the negative emotions of those around her, not emotions towards herself, but towards themselves and others. Anger becomes hate, sadness becomes sorrow, etc. With emotions already riding high as there are, and with the aura becoming stronger everyday, CHS is pretty much a powder keg, and all it will take is one spark to ignite a school-wide tragedy.