Supernatural Season 3: In Which We Learn Where Baby Demons Come From (hint: it's not where you think)
So, last season, Dean sold his soul to save Sam's life, and he has one year to live. Dean, being Dean, is determined to make the most of his time. Meaning there's a lot of drinking and naked women in his future. He becomes sort of...care free's not quite the right word, but very determined to enjoy himself.
A demon named Ruby shows up and tries to befriend Sam, saying that she's on his side and can help him save Dean. Her story is that she worked for Azazel, who was one of the major powers of hell. She wants to see his plan through, which was to raise the demon army, with Sam as it's leader, and crush the opposing demons, one of whom is Lilith. We learn from Ruby that no one in hell has ever actually seen Lucifer or any other fallen angel, to the denizens of hell, they're like god, some demons think they exist, some don't. We also learn that all the demons in hell started out as humans.
Ruby also brings a knife that kills demons, which is good, since the Colt has stopped working.
Lilith has risen in the power vacuum left by Azazel's death and wants Sam dead so he can't carry out whatever Azazel was planning.
Sam, as they get toward the end of the year, gets desperate, takes the Colt (which Ruby and Bobby have gotten working again), and summons the crossroads demon. He wants her to undo the deal Dean made, but she refuses, saying that even if she wanted to, she can't because it's her boss who holds the contract. Sam, being a little more ruthless than he ever has been before, shoots her in the head, killing the demon and the woman she was possessing.
A thief later steals the Colt from the boys, and eventually dies because she too had made a deal with a crossroads demon, and the Colt is lost, again. But, they still have Ruby's knife.
They track down Lilith at the eleventh hour, intending to use Sammy's growing powers and the knife to kill her a void the contract on Dean. This, of course, does not go according to plan, Lilith spanks Ruby out of her host body, takes it over, tricks the guys into thinking she's Ruby *just* long enough to break the barrier that had been keeping the hell hounds away from Dean, and then runs away.
But the damage is done, and Dean's dead and in hell.
Dean in hell.
This was a shortened season, because of the writers strike.