The Äußere Neustadt — the Outer New Town — is the part of Dresden that survived 1945 largely intact, and it has spent the decades since developing into the city's most lively and eclectic neighbourhood. During the GDR years it was the quarter where artists, dissidents, and alternative subcultures clustered; after reunification the bars and restaurants arrived in force.
The main arteries are Louisenstraße, Alaunstraße, and Görlitzer Straße, but the best places are often on the side streets and in the courtyard buildings behind them. The range is wide: Vietnamese and Japanese restaurants, traditional Sächsische cooking, Turkish pide places, craft beer bars, and wine bars. Quality is generally higher and prices lower than in the old town tourist zone.
For a good evening, start at the Kunsthofpassage in the late afternoon, walk north along Alaunstraße, and pick a restaurant for dinner before moving to one of the bars for the evening. The neighbourhood is lively until late on weekends. The Neustadt Bahnhof S-Bahn station puts you in the neighbourhood from the main station in three minutes.