Donald holds them to be a bad thing (5)
I believe the answer is:
demon
'be a bad thing' is the definition.
Although both the answer and definition are singular nouns, I cannot understand how they can define each other.
'donald holds them' is the wordplay.
'donald' becomes 'don' (I am not sure about this - if you are sure you should believe this answer much more).
'holds' means one lot of letters goes inside another.
'them' becomes 'em' (abbreviation).
'don' enclosing 'em' is 'DEMON'.
'to' acts as a link.
Can you help me to learn more?
(Other definitions for demon that I've seen before include "ace" , "Skilful person" , "Bad spirit" , "Fallen angel" , "malignant spirit" .)