Sources with direct knowledge tell TMZ  ... Donny passed away Tuesday in Las Vegas, where he was found in his hotel room bed.

The cause of death will not be determined until an autopsy is performed. We're told Donny was partying at one of the nearby hotel casinos hours before his body was discovered.

It's tragic news, as Donny was incredibly well-known and beloved in and around Hollywood ... not just serving as a regular guest on "Chelsea Lately" -- sometimes filling in for her go-to little person sidekick, Chuy Bravo -- but also performing on stage with Britney herself.

DD was hired as a dancer for Brit's Vegas residency show when it kicked off in 2013 ... and was a favorite pal of Britney's for years, often posing with her for photos and getting shout-outs from her too.

He also performed with Mariah Carey, Seth McFarland, Miley Cyrus, Joe Jonas, Kelly Osbourne and Hayden Panettiere.

He was a staple at Beacher's Madhouse for 2 decades, where he starred in a vaudeville-style variety show that featured tons of celebs. Jeff Beacher tells us they discovered Donny online and after he performed for a few years he was so talented Jeff let him produce the show.

He was also hired to perform private gigs for the likes of Paris Hilton, Victoria Beckham, Charlize Theron and other big stars.

Donny has a couple of movie credits under his belt, with appearances in 2017's 'It's Gawd!' opposite Tommy Chong, as well as a role in "Pain & Gain." Donny also stood out as a fierce advocate for little people, not just in showbiz ... but beyond.

Beacher tells TMZ, "Donny broke barriers in the little people community and was an inspiration to his peers. He will be missed terribly but his legacy and the impact he had on those who loved him will live on forever."

Donny was 43.