updated 01/13/2014 AT 8:15 AM ET
•originally published 01/13/2014 AT 8:00 AM ET
It wasn’t just a vacation fling.
“They danced and made out all night,” an onlooker tells PEOPLE of Moore, 51, and Friday, 27, who partied in the VIP section of the club at The Standard Hotel in Hollywood until 2 a.m. Sunday morning. “Demi was chatty and smiley all night. She looked flawless.”
When they weren’t dancing, the canoodlers, both dressed in black, hung out with Moore’s longtime friend, floral designer Eric Buterbaugh, at a table well-stocked with Moore’s signature Red Bull.
Sources have told PEOPLE that Moore and Friday, the drummer for the L.A. band Dead Sara, have been friendly since at least last summer. Moore, whose divorce from Ashton Kutcher was recently finalized, has been spotted at Friday’s gigs at The Sayers Club, where her daughter Rumer Willis, 25, often performs.