Fear, itself is a great follow up to the first Halloween special where the gang attend a haunted house on campus where a demon brings your worst fears to life. I find it powerful as it reveals that OZ is afraid of losing control of his werewolf side, Xander feels like a nobody while every one attends college, Willow her magic will consume her and Buffy that she'll always be alone even when she dies. It follows the trend of men in her life leaving Buffy thinking there's something wrong with her. Also Xander feels as though he didn't make the right choices during high school and now doomed to be a loser working off jobs without friends or a girl. Willow & OZ have always practiced their abilities openly now we realize that they are afraid it will spiral out of control and hurt someone.
The demon on the other hand was small with a big build up and yet works beautifully. His prophesy that in the end they will reject you actually isn't playing on a fear but comes true later on proving that a slayer is destined to be alone by either death or they no longer wish to be part of the fight. Maybe their abilities turn them against the champion of good and thus rob her of companion. Anything's possible in the Buffy verse with no one immune to its harming effects or death as it will be shown in later seasons.
The demon on the other hand was small with a big build up and yet works beautifully. His prophesy that in the end they will reject you actually isn't playing on a fear but comes true later on proving that a slayer is destined to be alone by either death or they no longer wish to be part of the fight. Maybe their abilities turn them against the champion of good and thus rob her of companion. Anything's possible in the Buffy verse with no one immune to its harming effects or death as it will be shown in later seasons.