Chevrons are marks that appear on the arm of a mortal who joins in the Demonic Academy owned by Kellman. They represent the process these mortals undergo while transforming into demons. With every evil task they perform, they gain another chevron. The sixth and final chevron is earned by killing an innocent, after which they would graduate the Academy and become a full-fledged demon.
Each chevron is presumbably earned by performing an certain evil task. The first chevron is most likely earned by joining the Academy, with each following chevron requiring a darker task, ending with the taking of an innocent life. A mortal who becomes a demon in this manner can earn additional chevrons, and additional powers, for loyal service to the Source of All Evil.