Can you define an LDS horror novel?
No. But I'll know it when I see it...
Seriously, LDS horror—as in demons, vampires, zombies, monsters, and such—is an oxymoron of sorts. Like LDS fantasy, horror presents some unique issues for LDS publishers. As a people, we don't really believe in those things. That doesn't mean we don't read horror or fantasy, but many LDS readers become seriously uncomfortable when those fictional elements are combined in a story with LDS theology and practice. Personally, I'd have a problem with the Laurel class president spending her nights slaying vampires, or a priest becoming a werewolf on occasion, although I have no problem with those things happening in Buffy the Vampire Slayer or the Twilight series.
Another issue is that in many horror stories (and movies), evil wins. It can't be stopped. It can't be beaten. This is contrary to what the gospel teaches. I don't like that message in non-LDS books and movies, I certainly wouldn't tolerate it in an LDS setting.
Has it been done? Has someone successfully combined horror and LDS elements? Sort of. On a national level, Orson Scott Card wrote Lost Boys which is about ghosts and an LDS family. Also, Unseen Odds by Shirley Bahlmann has some spooky stuff from LDS history, but I'm not sure I'd call that horror. (Readers, help me out here. I'm not a huge reader of horror, so I might be missing something.)
Will there ever be an LDS Stephen King or Dean Koontz? Highly likely.
Will their books be published by LDS publishers? I don't know. We'll have to wait and see. I just know that I won't be taking that risk anytime soon.