Who loses First

[Cire]

Player 1 just drew his last card and passed the turn
Player 2 has 2 life remaining and a grinning in play
yet before the upkeep cost of the demon Player 2 was able to play angle's grace
Player 2 now has 0 life remaining

If player 2 pases the turn, which player would lose? Either Player 1 for not being able to draw a card or player 2 because he's no longer protected by angles grace?

[Koby]

The player who is at 0 life at EOT will lose the game. You only lose for not being able to draw a card during your draw step.

[tyleredw]

Rukcus is correct. As soon as the Angel's Grace ability ends at the end of turn step, they would instantly die. Not to mention there's the Untap and Upkeep phases of the opponent's turn to go through before they would die from drawing, so you'd be dead for a whole 3 phases before the other guy would lose.

[Anusien]

During the cleanup step, after Angel's Grace's effect wears off, if conditions for a State-Based Action exist, the active player will get priority. You die at that time.

Your opponent will only lose the game if they have to draw a card and can't, not just when they have an empty library.