Limbo is a realm between the Human and Demon Worlds. It is described as a world filled with excess reality from both the Human and Demons realms. It is the Demon's closest connection to the Human Realm and the seat of all otherworldly power in the Human Realm.
Limbo was created when the Hell Gates were first opened by Demon King Mundus. Originally Limbo served as a bridge from the Demon World to the Human realm. Sparda sealed off Limbo from the Human Realm and transformed Limbo into a Parady World that maintains nearly the exact same physical features as the Human World.
Any Demons within Limbo are unable to effect any living being within the Human Realm, but they can still be effected by those in the Human Realm. All supernatural abilities within the Human World such as magic are drawn from Limbo through Pentagrams' which draw the magic power from the Demon lifeforce. Demons currently control and live within Limbo, filling it with Temptation, which is why Limbo is far too dangerous for Human presense. Powerful Demons and Hybrids are able to travel to and from Limbo. Living beings in the real world appear as phantoms in Limbo.
Limbo's physical shape can easily be distorted by a Demon at will, able to smash walls together, close alleys, manipulate gravity, and tear up streets, leaving bottomless pits. Although only powerful Demons are able to do so, as only a certain region of Limbo is controlled by each of the Seven Hells.