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Miss Knives is an antagonist of Chapter 1 of Paper Lily and acts as the final boss of this chapter of the game. Towards the end of chapter one's story as Lacie attempts to escape the facility her and Sai find themselves trapped within Miss Knives' house where, after loitering in the living room, they are both trapped inside cages which Lacie escapes from through currently unexplained means involving one of the games dream sequences. From there Lacie meets up with Spider who explains how the two must break Miss Knives' illusion in order to escape her house. From here Lacie and Sai do that and on the way learn of Miss Knives past and the experiments performed on her before a boss fight occurs and the two escape leaving Miss Knives behind in the facility in what is now revealed to be her cell, not her house.
Personality
Miss Knives herself is a broken and traumatised demon born/created from a child who was burnt during one of the Witch trials which occurred in the past. This trauma is further emphasized by the experiments which were done upon her to explore her power as a demon to create illusions and build upon it. She is shy most of the time and now avoids people as a whole likely due to her past interactions with them both in life and during her time as a demon.
Backstory
Before becoming a demon Miss Knives was, in life a girl born blind to two parents and lacking any siblings. Despite her disability her parents love for her made them keep her and try to raise her as a normal child. Miss Knives lives with this condition for many years and makes a friend during this time, Iris Miss Knives and Iris oft play together at the river bank and Iris enjoys Miss Knives presence despite her disability and finds joy in telling her all about the wonderful and amazing things which exist around them. It is during this time that the two make a promise to run away once they turn 14 (although Miss Knives is not completely on board with this as she enjoys her simple life). It was after this that Miss Knives' experiences her first 'blessing' as she simply woke up one morning able to see and was initially very happy about this despite now being able to see the middling situation she lived in. However due to her eyesight just suddenly returning many of the villagers and even her own parents became cold towards her as she was now seem as some mystic outcast and even Iris admitted she was nervous around her (though still overjoyed at her friends new sight)
After this Miss Knives would receive her second 'blessing', a sketchbook from her friend Iris which Iris had stolen from her family. However, many strange drawings which Miss Knives was not responsible for would appear within its pages. These were not pleasant either, being described as 'painted in black' and 'twisted and scary'. After this her life would return to (mostly) normal until her third blessing, her mother was sick and in an attempt to save her Miss Knives held a cold compress to her forehead and managed to unknowingly heal her of her ailment through mystical means. The townspeople, seeing her mother up and well again so quickly, accused her of witchcraft and burnt Miss Knives' mother at the stake, an event which Miss Knives herself would witness. From here her bullying would continue, culminating in a group of boys stealing her sketchbook, seeing the drawings within and destroying it, it is her that her fourth 'blessing' would occur leading to a proper manifestation of her mystic powers and causing her to destroy one of the boys legs, in the process getting ousted as a witch and losing her friend Iris as Iris' father forbade them from meeting.
From here the final chapter of Miss Knives' living life would begin as her family home was broken into and she was to be burnt as the stake as a witch with her father dying with her. Her father instead attempted to claim that she was not his child to no success before he was killed. Miss Knives was then in her cell when her fifth 'blessing' would come in the form of a knife which her friend Iris had brought for her to kill herself with, not before revealing that Iris had in fact told her father about Miss Knives being a witch in the hopes of him protecting her, not realising that the opposite would in fact occur. It can be assumed that Miss Knives did not take her own life and was instead burnt at the stake thus ending her living life.