Ok so I remember this horror movie were a group of teens go to a fair or carnival and is haunted. They get killed one at the time (a girl gets turned into a doll and they leave her like that because she cant talk) any ways the movie ends with the protagonist being reveal as a psychic and his head gets a big bigger looses his hair and his eyes glow (like Total eclipse of the heart) and he has a power battle with the demon or entity and then more like him come and they leave in energy leaving 1 or 2 or his friends alive. Is from either 70s or 80s.
One Dark Night (1982)? not a fair, but everything else fits.
http://www.imdb.com/title/tt0086050/?ref_=nv_sr_1
re-reading the OP, it actually sounds like Demon Wind. 1990, and still no carnival or fair, but it has the girl turned into the doll, the protagonist’s transformation and battle with the lead demon. i don’t know… bit of a long shot, but have a look.
http://www.imdb.com/title/tt0099401/?ref_=nv_sr_1