Was dating someone for 2 months then got the, "I don't want to be in a relationship" phrase. It was kind of a rebound situation, but the problem is I now have feelings for this person and we hang out with similar people. How should I proceed?

You don't have any choice you have to get over it. I wouldn't see this person for a while if you can, you need time to heal.

If he's gone he's out of the picture. Try to ease into this next relationship so the guy doesn't feel like rebound action. Go for it though unless you need more time, which is understandable.

Try to be romantic buy her a pet or som kida gift

Move on, make a plan to have no contact until you are sure that these feelings have disappeared.

You are asking how to deal with this?

If you had the will power you wouldn't be around him anymore. So make the effort to drop him from your social life. He is only going to remind you of what you could have been if you guys went ahead in a relationship. You may not think of it this way, but having him around you sub-consciously affects your feelings about him. It will only grow stronger for him.
Like 'neverme' said, stay away and find new people or persons to socialise with.