Chains of Misery
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At the early stage of his military service course, the elf would have to prove he has the right amount of guts (sic!) to be a true warrior. He'd have to organize a situation where he'd be captured and enslaved by the demons. As part of his necessary training, he would have to spend at least a couple of weeks in captivity before he'd make an attempt to escape and return to his allies at the elven side. By doing so he would naturally advance in a great number of important skills and improve his endurance and cunning, especially while planning his escape route.
Of course, many (most?) demons are perfectly aware of this elven trickery, thanks to their spies in Alvabrost, and would always take advantage of their handsome elven captives, again, at no cost. They knew the elf would have to spend at least a couple of weeks in captivity and wouldn't attempt to leave, quite the contrary, would try to get as much "experience" as possible from his stay. And the demons would readily offer it. There was more than enough time to play with the new "toy" until it gets boring, and then after the two weeks they'd just release him with a good slap on his elfish ass. Everyone's happy, nobody's angry, right? :3
Needless to say, this kind of a double game has always been an endless well of fun and inspiration for both sides. In the end, however, the elves figured out it's no real test of courage anymore and had to come up with something new...