The Dweller In Darkness is probably a survivor from the previous universe and originates from a dimension called Everinnye. The Dweller turned his back on his fellow denizens like Nightmare for example by following the Way of the Shamblu.
Over 20,000 years old, Dweller was feeding himself from the fear caused by the war of Human-Deviant, until he fought the sorceress Zhered-Na in a tremendous battle, but was defeated when she used Agamotto's power against him. Velka sent Dweller to a mystic slumber, but when the Great Cataclysm happened and sank all Atlantis, Dweller used the fear of said incident with his conscious to create D'Spayre.
He had much influence over some of the most feared villains of all time, such as Mr. Fear, D'Spayre, Spite, the Shade Thralls, and the Dream Weaver. Although the Dweller is extremely powerful, he prefers to do all of his work from behind the scenes, sending others to do what he wants done for him. When he realized that Earth was going to be impossible for him to take over on his own, he called forth the Fear Lords and asked for their help. They banded together, and, had it not been for the betrayal of Straw Man, would have taken over the Earth. In a fallout between The Dweller, Nightmare and a few of his creations, including D'Spayre and Spite, Dweller's body was destroyed. It was then revealed that his body is an inorganic cyborg that is only there to sustain the Dweller's life, and that the Dweller's true form is simply a floating head. Though the damage would have been fatal, The Dweller escaped, and was thought to have rebuit his body.
Dweller appared again during Journey into Mystery #633 - The Terrorism Myth, Part One and Journey into Mystery #636 - The Terrorism Myth, Conclusion. He was discussing Nightmare's intentions, who was using the incident with The Serpent to create a item called the Fear Crown and become more powerful than the rest of his fellow companions.
But in the end, every Fear Lord turned against each other to obtain said crown, but it was only Dweller who succeeded.
The Dweller In Darkness is a Marvel comics character created by Gerry Conway and Rich Buckler, and first appears in Thor #229 released in 1974.
Major Story Arcs
In his early appearances, he often clashed with Dr. Strange. He transformed some sewer workers in New York through a "Slithe" monster, and was defeated by Strange and Clea. He later journeyed to Nightmare's dimension for an alliance. After Nightmare refused, the Dweller took one of the sleeping souls in Nightmare's dimension for his own, imbuing her with great power as Dreamweaver.
After this failed, he transformed another human into a monster, and then empowered two demons, Ludi and Ningal, to attack Strange. None of these attacks succeeded.
The Fear Lords meet to discuss what to do about the Serpent, after Odin has already taken his body away. The Dweller feeling he was the first it should be his right to speak first, but all he says is that the Serpent was no threat at all. Secretly he is glad the Serpent is gone but regrets he isn't able to harvest the body for his own. Later, with kid Loki's unwilling help, Nightmare eventually managed to gain all the fear that the Serpent created, and forged it into a crown of great power. Loki then alerted the other Fear Lords and tricked them into battling each other for the crown. Since none of them would allow the others to have it, it sent them into a perpetual contest over its power, with none able to win.
Powers and Abilities
Dweller is one of the greatness demons of all according to Hercules. He is so powerful that most of his minions could bring down and give a hard time to heroes such as Thor, Hercules and Doctor Strange.
As the leader and founder of the group called The Fear Lords, it's expected that Dweller is the most powerful member. This can be seen when he fought Nightmare in the Dream Dimension and was the only one in the group to maintain the Fear Crown.
One of Dweller's abilities is incite fear and use it as a tool in his favor. Most of his vassals and D'Spayre were created in this manner.
His magic is immense and possesses vast physical strength as can be seen during his short fight against Hercules. Dweller demonstrated basic powers like teleportation, possession and others too.