Unlike manyother sceptical arguments, little attention has been paid to Descartes' demon argument. This paper discusses how to analyse this argument via the notion of epistemic possibility, and claims that the momentum of the argument rests on our inability to determine whether we are in the epistemic demon world or in the normal world. It goes on to discuss a likely version of Descartes' epistemic possibilities, emphasizing that attempting to analyse Descartes' notion of epistemic possibility in terms of current theories creates a new Cartesian circularity. The epistemic modal problem of the old Cartesian circularity is discussed, and it is argued that the old circularity would linger unless the epistemic principle(s), on which the new circularity is based surplant it. The paper concludes with DeRose's interpretation of Descartes' sceptical arguments and of how the old circularity can be expelled. It will be shown that the problem of disposing of the Cartesian circularity in an externalist way. DeRose's strategy seems to function only because it makes an appeal to the new circularity.