The 42-year-old Scottish hunk remained sober at the Festival in California and spent time with a dark-haired beauty at the A/X Armani Exchange and T-Mobile Neon Carnival on Saturday night, reported New York Post.
The "Bounty Hunter" star is said to have charmed his quarry out of the packed dance floor into an open space underneath the romantic light of a ferris wheel in the desert in Thermal where they enjoyed a slow dance.
"The two were grinding like they were at a middle school dance. He didn't seem to care who was watching," said a source.
Butler then "accompanied his dance partner to the Porta-Potties before they returned to the carnival-themed bash, produced by Brent Bolthouse."
Other stars at the Neon soiree included Usher, Emma Roberts, Zoe Kravitz with boyfriend Penn Badgley, Kevin Connolly, Paris Hilton, Jared Followill, Jessica Szohr and Emile Hirsch.
Butler completed a successful stint at rehab after being reliant on pain medication following a surfing accident, according to his spokesperson.