Demi Lovato reportedly finds it "hilarious" that people think she is romantically linked to Nick Jonas.

The hunky musician recently confirmed the 21-year-old songstress is set to appear on his upcoming solo record, which is thought to be titled Flames.

While there have been rumours of more than a friendship between pair, Demi is said to find it hilarious.

“She is like a sister to them all [Nick and his brother Joe and Kevin],” a source told RadarOnline.

“When Nick asked Demi to duet with him on a song for his new album, she was more than happy to do it. The fact that people would suggest that there is something romantic between the two of them is hilarious to her because it could not be farther from the truth.”

Nick, 21, has also made it clear there is nothing lovey dovey between himself and Demi. Speaking to MTV recently, he hinted at what fans can expect from their collaboration.

"She and I recorded a song that I think is beautiful," he said. "It’s not necessarily a love song. It’s so easy to do a duet that’s a love song because our relationship isn’t really that.”

The pair know each other well as Demi previously dated Nick's brother Joe, although they split in 2010.

Nick also spoke about the music video for his first single from the album, Chains, recently. It stars Dylan Penn, daughter of Sean Penn and Robin Wright, and it seems the teaming up came naturally.

"Dylan and I have mutual friends and we were looking for someone for the video. We were wracking our brains for someone interesting and cool and our friends said, 'Dylan would be great,'" Nick recalled to

"We were all floored by the idea. She came in and she killed it."