Maksim and Karina: What Went Wrong?
09/09/2009 AT 05:05 PM EDT
"They both knew when they had been spending more time together recently things weren't going so well," a source close to Smirnoff tells PEOPLE. "She's not devastated but it obviously hurts, she's angry. She'll always love him and respect him but she always knew in heart of hearts from the beginning of their relationship that he wasn't the one for her."
Chmerkovskiy, 29, and Smirnoff, 31, who had gotten engaged on New Year's Day in Las Vegas, couldn't get past a major hurdle: they didn't see eye-to-eye when it came to children, pals say
"Maks was ready to start a family and have children with Karina, and he came to realize that wasn't really what she wanted," says another source close to the couple. "He's just heartbroken things didn't work out. He'll always respect Karina."
Plus, relations with the relatives were strained. "His family did not want him to marry her," says a Chmerkovskiy friend.
"Even her family thought he may not even be the one," adds the Smirnoff source, who agrees that Smirnoff wasn't ready to have children yet, but wanted to later on. "They think it worked out for the best. She knows she needs to take time to focus on herself and not jump into situations. She wants to focus on work and she'll be fine."
The pair, who were in talks to do their own reality show, will still work closely together when Dancing's ninth season premieres Sept. 21 on ABC.