Demi Lovato Is 'Very Focused on Staying Healthy' as She Works on Upcoming Album, Says Source

A year after her overdose, Demi Lovato is moving forward with positivity.

According to a source, the “Sorry Not Sorry” singer is currently “very focused on staying healthy” as she works on her upcoming record, which will be her seventh studio album and first since 2017.

In between visits to the recording studio, Lovato “goes for hikes with friends and takes boxing class [in Los Angeles],” says the source.

On Tuesday night, Lovato, 26, looked happy and healthy as she stepped out for a birthday dinner for her friend, singer Chloe Star Nakhjavanpour (who is also known by her stage name Etch), at Barton G. in West Hollywood.

At the dinner, “Demi looked amazing. She was smiling, seemed very relaxed and just very happy,” adds the source.

An onlooker previously told PEOPLE that Lovato and the group were “loud and cheerful” as they enjoyed dinner and celebrated the 22nd birthday of their friend, who documented the night on her Instagram.

In one video posted to Nakhjavanpour’s Instagram Stories, Lovato could be seen resting her hand under her chin with the caption, “oh she posin’.”

Through a tough year, Lovato has been keeping a close-knit circle of family and friends around her.

“Demi is very close to her family,” the source says. “She often stays at her mom [Dianna De La Garza’s]. She attended [Madison’s] high school graduation in June. Spending time with her family always seems very important to her.”

“[She] is surrounding herself with a small group of friends,” the source continues. “You can tell that everyone is very protective of her.”

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Last month, Lovato attended the opening night of Christina Aguilera’s Las Vegas residency, The Xperience, with her friends Elizabeth Mitchell a.k.a. Sirah and Matthew Scott Montgomery. Weeks earlier, the group traveled to Bora Bora together.

Alongside a photo of her, Sirah and Montgomery from the trip posted to her Instagram, Lovato wrote, “Just me and my best friends living our best lives..Thank you for never leaving me in my darkest moments, for always drying my tears.. even when they’re from watching Moana.

“I’m so lucky to be best friends with two incredible souls who are so talented and creative because it inspires me daily. And you’re so supportive of me and every little thing I do..,” she continued.

Lovato went on to note how Sirah and Montgomery have “traveled across the country to visit me and stayed with me at my house for days on end when I’m struggling to make sure I’m okay.”

“But most importantly you never abandoned me like others did when I was going through s—.. you were there to listen, without judgement and only love and I can never fully express what that means to me,” she wrote.

“You’re the greatest friends I’ve EVER had and our future together is so bright,” she concluded her note. “I love you both more than you can imagine!! Thank you for this past week 💗 @sirahsays @matthew_scott_montgomery ps. I’m both yalls biggest fans.”

Though Lovato has mostly remained silent on social media (aside from thirsting over Bachelorette contestant Mike Johnson) since defending her new manager, Scooter Braun, amid his feud with Taylor Swift earlier this month, she previously teased fans in June about her new music on the way.

“You know what’s great about making an album? You get to say anything you want, be as open and honest as possible and tell your side of the story regardless of who might not like it…” Lovato wrote on her Instagram Story of the new project.

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The last time Lovato spoke honestly in her songs was in June 2018 when she released a single called “Sober.” The song detailed how she broke her six-year sobriety and was released just weeks before her overdose on July 24, 2018.

Lovato — who has been open about her battles with addiction, mental illness, and disordered eating over the years — also showed off her new ink of the word “me” tattooed on the inside of her finger last month, which she explained will serve as her “forever reminder” to put “me first.”