The man, who is in his 20s, was believed to be outside a takeaway on the Port Road when the incident happened.
It is understood there was an altercation around 3.30am and the man fled the scene.
However, as he ran away it is believed he may have fallen and suffered serious injuries.
It is not believed the man was involved in the altercation or was attacked.
The man was taken to Letterkenny General Hospital but has since been transferred to the Mater Hospital in Dublin.
It is understood the man suffered head and spinal injuries.
Gardai say they are not looking to interview anybody in relation to the incident.
However they are viewing CCTV footage from the area.