A source tells E! News that the troubled teen is "getting better" and, while she currently remains on the mend in Chicago, is hoping to be able to go home before the holidays.
"She doesn't want to be in the center for Thanksgiving and wants to go home," the source says.
In the meantime, she plans to bring a little piece of Hollywood to her.
We hear that Lovato is planning to watch pal Miley Cyrus perform at the American Music Awards, which airs Sunday.
But though the 18-year-old hopes to be well enough to spend the holidays at home, she's not planning on going back to work until after the New Year, a Disney Channel insider tells E! News.
The network is hoping its Sonny With a Chance star returns to the show within the first few months of 2011, but they do not want her rushing back before she's ready, the source says.
Disney announced last week that it would focus the sitcom's plot on the show-within-a-show, So Random!, to pass the time while Lovato's gone.
"They're still committed to her," the source said. "No one is abandoning her. But she is holding off on her music for a bit."
"There are a lot of people who never heard of Demi Lovato before this," the insider added, "and if she can get through this, she will come back stronger and bigger than ever."