Guglhupf is a wonderful cafe in Durham. The food is always great, and the coffee and chai are top notch. I love how they give you a little shortbread biscuit with your hot drinks. The bakery produces some amazing stuff. Unfortunately, there are a few downsides -- the staff is not always as friendly or as quick as they could be and they don't have free refills on coffee (just a pet peeve of mine that you have to pay extra for refills). But sitting outside on the patio enjoying the $2 bread basket on a weekend morning is fantastic...we actually head here instead of Foster's some mornings...
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