One of the protagonists, Wally Enfield, is a recently fired postal worker. The remaining protagonists find a large collection of guns in his home, realizing that Enfield intended to attack the post office. This is likely a reference to several real-life spree killings perpetrated by maniac postal workers.
"Demon Knight" was a script that had been circulating in Hollywood for a number of years. Although it wasn't adapted from E.C. Comics and lacked the standard morality play, the producers decided it had the right mixture of horror and humor to be produced as a Tales from the Crypt (1989) spin-off movie.
At the end of the closing credits, the Cryptkeeper announces the forthcoming feature "Dead Easy," which was intended to be the second film in a Tales from the Crypt (1989) theatrical trilogy. "Dead Easy" (aka "Fat Tuesday") was a zombie story set in New Orleans, but it was eventually abandoned, and the third film, "Body Count," also went unproduced. Ultimately, a "Tales from the Crypt" trilogy was completed, with "Demon Knight" being followed by Bordello of Blood (1996) and Ritual (2002).
The entire set was constructed practically in an abandoned airport hanger in Van Nuys, California. Since the bulk of the film was set over the course of a single night, this allowed the crew to shoot during the day.