The kids were possibly sacrificed on stone slabs where the monsters live. They were sacrificed or transformed under the Symbol jade is chasing.

The very symbol is pained on the walls of the cave were the monsters live.

Tabatha didn’t start seeing those visions of the children until see went into the monster cave.

Children toys have been spotted in the monsters lair.

We also know that the monsters are humanoid in nature.

The Children have a pale complexion like the monsters, and In a sadistic way the monsters like to play.

Also smiley monster was genuinely carious about that bus he killed that old couple on. Perhaps he carious about the real world.

The prisoner referred to the monsters as the tip of the spear suggesting that are in servitude to something worse. Perhaps that thing enslaved the children.

Perhaps the boy in white wanted Sarah to kill the boy so he couldn’t be turned. He I think that’s a stretch tho.

Problems with my theory. My theory doesn’t account for why there are older monsters, and why they dress the way they do.