The 'X Factor' judge and the One Direction singer have spoken of their mutual attraction in the past but Demi has finally confessed to some close work pals that she and Niall are seeing each other, although it is a long distance relationship.
A source told the Daily Mirror newspaper: ''Demi's told the guys backstage she and Niall are loosely dating - it's casual but they are definitely dating, albeit long-distance.''
Demi has previously spoken of her affection for Niall but insisted they didn't want a long distance relationship as it would be too difficult.
She said: ''He has a lot of great qualities.
''He is an amazing listener and makes me laugh a lot, two of the main qualities I look for.
''He knows I have a little crush on him, and we enjoy having dinner when we get the chance. We speak and message all the time.
''I don't want a relationship over Skype; we are both in a place where we feel zero pressure to rush.
''We share the philosophy that the right one is worth waiting for.''