What are fallen angels?
http://www.carm.org/questions/fallen_angels.htm

Angels are created beings used by God as messengers, warriors, and servants. The word "angel" comes from the Greek word "angelos" which means messenger. Angels are spiritual beings without bodies of flesh and bones, though they apparently have the ability to appear in human form (Gen. 19:1-22). Angels had many functions. They praised God (Psalm 103:20), served as messengers to the world (Luke 1:11-20, 26-38; Luke 2:9-14), watched over God’s people (Psalm 91:11-12), and were sometimes instruments of God’s judgment (Matt. 13:49-50).
Fallen angels are those angels who rebelled against God along with Lucifer an archangel who became the devil. Following are verses often quoted in reference to the evil one.

* "How you have fallen from heaven, O star of the morning, son of the dawn! You have been cut down to the earth, You who have weakened the nations! 13"But you said in your heart, ‘I will ascend to heaven; I will raise my throne above the stars of God, And I will sit on the mount of assembly In the recesses of the north. 14‘I will ascend above the heights of the clouds; I will make myself like the Most High.’" (Isaiah 14:12-14).

Most scholars agree that one third of the angels fell into sin and became demons.

* "And another sign appeared in heaven: and behold, a great red dragon having seven heads and ten horns, and on his heads were seven diadems.4And his tail swept away a third of the stars of heaven, and threw them to the earth . . . " (Rev. 12:3-4).

In the future, there will be a judgment upon the fallen angels:

* "Then shall he say also unto them on the left hand, Depart from me, ye cursed, into everlasting fire, prepared for the devil and his angels" (Matt. 25:41).
* "For if God spared not the angels that sinned, but cast them down to hell, and delivered them into chains of darkness, to be reserved unto judgment" (2 Pet. 2:4).
* "And the angels which kept not their first estate, but left their own habitation, he hath reserved in everlasting chains under darkness unto the judgment of the great day" (Jude 6).
* "And the great dragon was cast out, that old serpent, called the Devil, and Satan, which deceiveth the whole world: he was cast out into the earth, and his angels were cast out with him" (Rev. 12:9).

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References
- Achtemeier, Paul J., Th.D., Harper’s Bible Dictionary, (San Francisco: Harper and Row, Publishers, Inc.) 1985.
- Swanson, James, Editor, New Nave’s Topical Bible, (Oak Harbor, Washington: Logos Research Systems, Inc.) 1994.