Yes, demo is in the scrabble dictionary

...and is worth 8 points by itself.

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demo

noun

1. A brief tape or recording illustrating the abilities of a musician or other performer.

2. A demonstration, as of a product or service.

3. Informal A product, such as an automobile, used for demonstration and often sold later at a discount.

4. Informal Demolition.

5. A recording intended to show off a song or performer to a record producer.

verb

1. Record (a song or piece of music) to demonstrate the capabilities of a musical group or performer or as preparation for a full recording.

2. Demonstrate the capabilities of (software or another product).

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Top Words by points

Points

Word Game

dome

7

Scrabble

2 Letters

Scrabble® Points

do

3

om

4

oe

2

od

3

mo

4

me

4

em

4

ed

3

de

3

3 Letters

Scrabble® Points

emo

5

med

6

mod

6

dom

6

doe

4

ode

4

4 Letters

Scrabble® Points

dome

7

demo

7

mode

7

Found 18 words in 0.16302 seconds