It is called “nominalisation”.
http://en.wikipedia.org/wiki/Nominalization
And it is not incorrect English to use “an evil” as a noun.
It is not a case of evil being both a noun and an adjective. Evil is an adjective, but can be made to function as a noun. English is a fascinating language in that it allows for such transformations in a number of ways.
You can get the gist of it from the above Wikipedia article.
“An evil threatens them”.
