Since you are in the underdark, your mage(s) should have Lower Resistance memorized at least once (hey, there are Drow around after all). Use it and anything that protects against fear. Summon some fire elementals etc. Treat him like a mini Firkag w/o the wing buffet and breath weapon.
Actually I won this one on a bug. J and Minsc were running around yellow. Nalia, Imoen ans Aerie were standing around looking stupid because thay had already burned off most of their spells earlier and my PC (stalker) was not looking pretty after soloing the demon for a few rounds. Aerie had the Ring of the Ram, so she hit him with it. For some reason, its charge status wrapped to 65k. So Whohooo! Aerie (of all people) punched it to death
I know, it is cheezy and I probably SHOULD have reloaded, rested up and fought a real battle, but I was lazy and wanted to get into the Drow city ASAP.
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- Cayle