Devil's Lair

is a location in the game.

It is the home of a playable character the Devil.

Recruiting the Devil
First, you have to throw something into the lair's hole first (Acorn, Coin, Mushroom or Diamond), then the Devil will appear. If you give him the Rope, he will join you and become a playable character. Unlocks the "The Devil Is My Friend" achievement.

Sending the Priest to Hell
After the Devil has captured the Priest, sending him here will show a cutscene that the Devil is shoving the Priest into the hole, sending him to Hell. After this scene, the Devil is no longer playable, and the Kingfisher appears. Unlocks the "Deal With The Devil" achievement.

If you revisit the after, you can see the Priest's soul attempting to escape Hell. Unlocks the "Your Soul Is Mine" achievement.