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Ronald "Butch" DeFeo, Jr (renamed Sonny Montelli in the second film) is a character based on the real mass murderer of the same name who was convicted of slaying his family on November 13th, 1974. The murder started the events leading to the The Amityville Horror.
At 3:15 AM one night in 1974 Ronald murdered his parents and siblings with a rifle while they slept. After killing his family DeFeo made his way to a local bar, where he was arrested and later sentenced to life in prison. DeFeo's reasons for killing his family are unknown, though he may have been possessed, or at least influenced, by demonic forces inhabiting the DeFeo home, 112 Ocean Avenue. 
George Lutz, who had moved into 112 Ocean Avenue with his family a year after the Defeo murders would later have a vision of DeFeo inside a small, completely red room he discovered in the basement of the house; George himself also bared a startling resemblance to Defeo. 
The 1982 film Amityville II: The Possession is based on the book Murder in Amityville by parapsychologist Hans Holzer. It is a prequel set at 112 Ocean Avenue, featuring the fictional Montelli family who are said to be based on the DeFeo family. The story introduces speculative and controversial themes, including an incestuous relationship between Sonny Montelli and his teenaged sister, who are based loosely on Ronald DeFeo, Jr. and his sister Dawn. 
In 1974, Ronald moves into a house on Ocean Avenue with his family. While living there he begins to hear voices throughout the house and suffer from disturbing hallucinations. As the voices and visions become worse, his relationship with his family grows strained. Ronald seeks help from the local priest, Father Callaway, who, not entirely believing Ronald, does nothing to help the young man. Growing steadily more insane due to the presence in the house, Ronald winds up killing the family dog in a paranoid fit.
Twenty-eight days after moving into the house Ronald, while in his room in the basement, finally snapped and at 3:15 in the morning killed his family with a rifle; Ronald killed his youngest sibling Jodie last, finding her hiding in the closet, where he shot her in the forehead. After killing his family Ronald barged into a local bar in a frenzied state, claiming his entire family was dead. After a short while under police protection it was eventually discovered it was Ronald who had killed the other DeFeo's and he was arrested; pleading insanity at his trial and claiming that a presence in the house had made him slaughter his loved ones Ronald was sentenced to life in prison. 
While living in the DeFeo's house George Lutz would at one point experience a vision depicting Ronald killing his family before blowing his own head off with a rifle.