Demi Lovato is in "great spirits" following her 10-week stint in rehab.

The 18-year-old singer-and-actress - who left an unnamed Chicago-based clinic last week after being treated for "emotional and psychological issues" - is said to be taking her recovery "very seriously".

An insider explained to gossip website Hollywood Life: "Demi is in great spirits, a great mood. Her treatment really seems to be working and it isn't an act, she's taking her recovery very seriously."

Last month, the Disney star - who entered rehab voluntarily at the beginning of November last year after an incident in which she allegedly punched backing dancer Alex Welch - reportedly settled her dispute with the dancer by giving her a small sum of money in compensation.

A friend said at the time: "It's not even close to $100,000. Way, way less than $100,000.

"Alex never expressed dissatisfaction with the settlement. I think she was just ready to just move on. She's happy and moving past the situation and moving forward positively."