The 20-year-old 'x factor' judge is reportedly still in love with the 32-year-old actor - who she had dinner with on Sunday (02.09.12) and it is only a matter of time before they reunite.
A source told HollywoodLife.com: ''They are not officially dating but it's only a matter of time. They really have always liked each other, still have tons of respect for each other, and are still in love. They definitely have a thing for each other and act on it from time to time. But to say they are officially an item would not be the case at this time.''
When asked if he was romancing Demi, Niall said: ''I wish! No there's nothing going on, but she's a lovely girl.''
Niall was first linked to Demi earlier this year after they both revealed they had crushes on each other.
Demi said: ''I would snog Niall. I do have a little crush on him.''
''I love Niall, he is so cute. I hear he's really sweet and he's a cutey pie!''
Meanwhile, when asked who his celebrity crush was, Niall, 18, replied: ''Demi Lovato - she's a beautiful girl.''
He was then asked who he prefers out of Kim Kardashian or Demi and he said: ''Demi definitely.''