When Demonlord of Ashmouth enters the battlefield, exile it unless you sacrifice another creature.
Undying (When this creature dies, if it had no +1/+1 counters on it, return it to the battlefield under its owner's control with a +1/+1 counter on it.)
Demonlord of Ashmouth’s enters-the-battlefield ability will trigger no matter how it entered the battlefield, including because of its undying ability.
You don’t have to sacrifice another creature, even if you control one. You may choose to exile Demonlord of Ashmouth.