In the most recent issue of Teen Titans (#42), we learn that Kid Devil reached his current status of flame-breathing demon-looking feelow that creeps out Moody Raven, by making a deal with Neron, who's DC's version of the Devil (I think). In return, Kid Devil promised to forfeit his soul if he lost trust in Blue Devil by his 21st birthday. Ah, those deals with the Devil, they bone you over every time. Just ask Master Pandemonium (if you can find him; where'd he go?).
The thing is, Niles Caulder told Elasti-Girl in Teen Titans #36 that there was nothing mystical about Kid Devil; that'd he'd been subjected to meta-human gene manipulation. This leads me to conclude someone's lying about something. But who? Neron or Caulder?
Caulder could be right, if Neron isn't a devil at all, but just some sort of highly advanced alien scientist, one that masquerades as a devil, because Earth religions make it more likely people would turn to the Devil for help than a creepy alien. The souls could be the aura or life force that Thanos described in Annihilation #3 (yes, I'm mixing comic universes, and I plan to continue), and I'm sure a clever alien can find some use for those. It's reminiscent of someone's quote that advanced enough alien technology would be indistinguishable from magic to us (I know it from Arthur C. Clarke novels, but I think it originated with someone else).
It's not unprecedented, as the alternate universe Earth X put forth the idea that Mephisto wasn't a devil at all, just a human with a lot of power trying to be Mephisto that eventually became convinced he was Mephisto (I think, maybe that was Odin. Or both).
Of course, the other option is that Caulder was b.s.ing about Kid Devil's appearence not being the result of magic. A magical origin would put him somewhat outside Niles' standard realm of science-related accidents, and weaken Caulder's claims that he could help Eddie, and thus, Eddie should remain with the Doom Patrol.
So, who do you trust more? The Devil, or the Scientist? I figure Neron was being straight with us. Like he said, the truth is the strongest weapon (or something. I'm paraphrasing).