I agree with Kaydi that a paternity test is definately a must! Also, your fiancee needs to get a lawyer, especially if the child is truly his son, to have a legal agreement between both parties that should address custody, child support, what is expected from both parents, etc.
Also, if he is really your fiancee's son think long and hard about how that will affect your marriage. This woman sounds like she has an evil spirit and that could definately put a wedge in your relationship and cause difficulties later. If you are having serious reservations about marrying him right now, a couples counselor, priest, preacher, etc. could help you and your man sort out any issues before you say "I do".