Restoring full and differential backups from production to a report server
Although you have WITH NORECOVERY on the 1st statement, the error is actually occurring since there is an existing database with the name Demo which cannot be overwritten without explicit instruction.

Try:

ALTER DATABASE Demo SET SINGLE_USER WITH ROLLBACK IMMEDIATE;

RESTORE DATABASE Demo 
FROM DISK = 'C:\DBBackup\Demo_FULL_Sunday.bak' 
WITH REPLACE, NORECOVERY; 

RESTORE DATABASE Demo 
FROM DISK = 'C:\DBBackup\Demo_Diff_Monday.bak' 
WITH RECOVERY;


Be aware this will totally destroy the existing database and replace it with the contents of the backup file.  Ensure you do this on the correct server, since you will have no 2nd chances.