what should i make with my demonite ore terraria

Answer 1

You need to kill the eater of world as well then you'll figure it out.

Answer 2

Tools - Nightmare Pickaxe, War Axe of the Night, The Breaker
Armour - Shadow Scalemail, Shadow Greaves, Shadow Helmet
Weapons - Light's Bane, Demon Bow
 Other - Demonite Bar

Remember that Shadow Scales are required for most of these items as well