AM Demodulation using MATLAB

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Hey all,
I am having some trouble with AM demodulation using MATLAB. I used the
built-in MATLAB function butter to design a low pass filter and using
the transfer function obtained, I filtered the modulated signal
multiplied by the carrier. Here's the part of my m-file which deals
with it:

dam=cos(2*pi*250*t).*am; % am=amplitude modulated signal
[b,a]=butter(5,250*2*Ts); %designing low pass filter with corner freq
250Hz, Ts-sampling %interval
dam,1) = filtfilt(b,a,dam,1)); % filtering the demodulated signal
dam=dam*2; %scaling to get original amplitude back


the problem is that I'm trying to filter the signal without using the
built in matlab functionality. I tried to multiply the transfer
function of filter with the fourier transfer of dam (fft(dam)) to low
pass filter it and then took the inverse fft of the answer, but came up
with a weird answer when i tried to plot the demodulated signal.

could someone tell me what i'm doing wrong when i am trying to filter
it? Is there any other way around this without using built-in matlab
functions? Thanks a lot in advance. -Farah.