At midnight, the tables are packed. The floor is crisscrossed with computer cords, and books and highlighters clutter every available surface. Customers' faces are lit by the glow of their laptop screens, and their hands occasionally stray from the keyboard to lift a nearby coffee cup.

But this is not a college campus library. It is Sunday night at the Happy Donuts, the last 24-hour restaurant in Palo Alto.

The appeal of the small eatery south of Page Mill on El Camino extends beyond its donuts, which the staff serves up glossy and fresh.

"I'm not a big fan of donuts," said soccer coach Daniel Aregai, who comes to the restaurant three days a week and usually buys chocolate milk. "It's quiet, nobody bothers you, and there's no loud music."

Students make up the bulk of late-night customers, coming from Stanford University, Foothill Community College and sometimes local high schools to take advantage of Happy Donuts clean interior and free Internet access.

"It's open late; it's cheap. I don't know, it's kind of charming," said Stanford student Natalie Tabb, who goes there to study before major exams. "Campus can get pretty claustrophobic."

More and more people have come to share her appreciation of the restaurant, and it is common for customers to fill up the approximately 800-square-foot restaurant on weekend nights.

Cameron Hoppas, a Foothill student, has experienced this firsthand.

"It gets too crowded here. Sometimes I buy a drink then go study in my car and check in later to see if any space has opened up," he said.

With the closing last month of Denny's in Palo Alto, people looking for a place to sit and eat late at night have found their options very limited. Denny's franchise owner Carole St. John leased the property to the Su Hong restaurant when she decided to retire.

"We did great on the graveyard shift," St. John said. "Business was fantastic."

Customers who frequented both the Denny's and Happy Donuts said the two restaurants served slightly different purposes.

"Usually I was partying late, and I needed some place to fix myself," said Foothill student Rich Sportsman of his reasons for going to Denny's. He now visits Happy Donuts once or twice a week to study.

"I'd like to believe I could be more productive here than other places. Maybe it's the caffeine," Sportsman said.

Some feel that the dwindling number of 24/7 restaurants in Palo Alto reflects an inattention to those who would make use of the city's night life.

"My sleeping habits don't conform to the culture of Palo Alto," said Stanford student Amin El Gamal.

He is not the only one.

Jeff Suhr, who was at Happy Donuts recently with his brother Greg, wishes "pretty much everywhere was open 24 hours. But I work at a restaurant, so I could see why some places want to close earlier."

Suhr believes the restaurant is a haven for people suffering from insomnia and boredom.

"It's a very good place to go if you happen to be awake, because instead of sitting at home and being awake, you can go do something," he said.

The donut shop — which also serves sandwiches, pastries and bagels — is perfectly equipped for night owls with no clear agenda.

"Here they don't really mind if you sit for hours and hours," Hoppas said.

Brian McCaul, who takes classes at San Jose State University, visits the shops three or four times a week because of its convenient location and amenities.

"My Internet is not working at home, and if I have to call back home to Ireland I can use Skype here. Technology and donuts seem to go well together," he said.

In the time McCaul has spent at Happy Donuts, he has seen the full spectrum of people the place attracts. You Tube engineers, homeless Vietnam War veterans, religious advocates and an eccentric who borrows people's laptops to buy shoes on the Internet have all passed under the store's neon sign.

For some of those people, Happy Donut's is a second home. Ken Gleason, whose grey mustache betrays his age as he sits nearby a table of fresh-faced teens, spends five nights out of the week there reading newspapers.

"I live in boarding homes and hotels most of the time, and it gets rowdy and stuff late at night," Gleason said. It's only a donut shop, but sometimes that's all he needs.

"It passes the time. Donuts to eat, if you want, and coffee to drink."

As timeless as the 24-hour restaurant is, one change has just occurred: New proprietors took over this week. Ling Chow, whose family now owns the shop, is geared up to become more familiar with the Happy Donuts culture.

"It's just a completely different atmosphere at night, from other places. It's like a big family. Kind of weird, but it's great," she said. She added that the family has no major plans to change the eatery, aside from expanding the menu.