Nietzsche's influence is evident in this chapter. Sinclair and Demian's discussion of "the herd instinct" that saddles most men may as well have been lifted straight out of Nietzsche's Beyond Good and Evil (1886). There, Nietzsche advances the view that only a very few men have the courage to express their will. The rest, the herd, simply follow rules that have been set forth for them by others or by religion. A special few transcend these rules to be able to express their will. Demian and Sinclair, in calling the rest the herd, mark themselves as among those few supermen (Übermenschen).
When Sinclair meets Frau Eva, she comments that she recognized him immediately, implying that he bears a certain sign, the sign borne by all people of their type. This sign explains why the pictures Sinclair has been drawing in previous chapters look like Demian, Frau Eva, and Sinclair himself. Earlier in the chapter, Demian notices this sign as well. He tells Demian that it is their sign, the thing they used to call "the mark of Cain." This mark or sign is a touch of mysticism running throughout the novel. It is never quite explained what it is or how the characters recognize it. This is not uncommon for Hesse, who often employs mystical elements in his writing.
During their initial conversation, Sinclair addresses Frau Eva as "dear mother." This emphasizes one aspect of their relationship—she watches over and protects him. Yet, it also highlights their highly unusual and multi-faceted relationship. After all, Sinclair is in love with Eva. This confluence of romantic and maternal love in their relationship points toward a further disregard for societal norms and taboos.
The storm at the end of the chapter offers multiple layers of symbolism. First, we are presented with the symbols that the characters themselves discuss. The sparrow hawk that Sinclair sees forebodes a freedom, but yet tumult; its coinciding with Demian's dream indicates to both of them that something big is about to happen. Second, this whole scene is laden with symbolism that the characters do not recognize. The scene takes place in the context of a storm. During the storm, Demian is passed out and Sinclair sees the sparrow hawk in the clouds. Hesse uses the storm to present these happenings to the reader as ever more chaotic. When the "gleam of sunshine burst through," Sinclair returns to find Demian awake. The end of the storm brings with it a calmer, more serene moment for the two boys, in which they can reflect and discuss.