Reed, 25, and Hough, 28, were spotted "making out" on April 18 at Rock and Reilly's in Los Angeles and were accompanied by Hough's costar and pal Mark Ballas and dance pro Cheryl Burke, the mag said.
"The whole group was drinking and partying. Derek bought shots for Nikki at the bar," a source said. "There was lots of PDA, Nikki was feeding him, holding hands, and they left together.... They didn't seem to care if anyone was watching."
However, the canoodle communique was dialed down by another source, stating that the "Scout" star, who is good friends with Hough's sister and "
"She is focused on her divorce from Paul and caring for that relationship as well as her latest film projects," that source added. "Nikki and Julianne are good friends, and she has hung out with Derek a few times through her. They're having fun but it's nothing serious."
Indeed, canoodling and dating are two totally different things.
Reed was reportedly spotted backstage at a taping of "DWTS" on April 29 and attended the Kaleidoscope Ball at the Beverly Hills Hotel on April 10 with Hough's sister and TV personality
Hough was previously linked to several Hollywood women and another of his sister's good friends:
Reed and her soon-to-be ex-husband announced their intention to divorce in March and had reportedly been living separately for six months because of different work obligations.
"They will continue to share their love of music, and are still working on their debut album, 'I'm Not Falling,' releasing in 2014," the statement said. "They remain best friends and look forward to their continued journey together."