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Hi, I'm working on To Find A Home VN, where you play a witch who ends up at the haunted house after being evicted and meets some oddball fellow supernaturals in the process. :)

We're planning to finish up the game by the end of the summer and have a public demo out (no updates with new content to demo itself, just bug fixes and such) while we work on the game in studio.

Since the rules confuse me a little, I was wondering if I can apply the game to the jam or does the demo disqualify us?

Wow! That sounds really cool! I can't wait to see it--and I'm curious to check out the demo now ^^

Since the rules confuse me a little, I was wondering if I can apply the game to the jam or does the demo disqualify us?

I'm actually thinking of modifying that rule, because I have a few folks who also were tinkering with making demos.
I mentioned off the record about calling it like an "Act 0" or a test run; So long as it has a sort of ending. 

So if you can wrap it up to be a self contained story, you can always prompt to see the continuation in the full game. I just want to prevent half done projects, if that makes sense. Cliffhangers are a-okay, but stopping in the middle of a prologue a little iffy.

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TLDR: To answer your question though, your demo is already out, so you definitely qualify since the project you're working on now is the full game itself!

Ok, thanks! I'll apply the game!