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People cry and hug each other while they sit on the grass at the Polyvalente Montignac, the school sheltering the people who were forced to leave their houses after the explosion, in Lac Megantic, July 7, 2013.MATHIEU BELANGER/Reuters

Relatives of the more than 40 people officially considered missing expressed little hope Sunday of finding them alive after a train carrying crude oil derailed and exploded, setting fire to a portion of the eastern Quebec town of Lac-Mégantic.

Raymond Lafontaine, president of a local construction company, believes his son Gaëtan Lafontaine and his daughter-in-law Karine died in the explosion Saturday. He criticized officials for allowing the rail line in the centre of the town.

"They have been running petroleum trains through our town for the past two years. It's criminal," said Mr. Lafontaine, who spoke Sunday in front of the high school Polyvalente Montignac, which is currently serving as the town's main shelter.

Others described a surreal scene.

"I slept in my car last night," said Sylvain Tessier. "I didn't know if I'd sleep well inside [the high school]. We're pretty much cut off from reality."

Red Cross spokesperson Myrianne Marotte said that 163 people stayed overnight at the school. Despite the horrific situation, morale is high, she said.

Family members of the missing milled about the school Sunday.

"We think my uncle was at Musi-Café [near the scene of the explosion] when it happened," said Joannie Bouchard, a young woman from Lennoxville, Que., who came to the town Saturday evening to support her family.

"And besides, his apartment is right above. My grandmother was lucky. She was staying with him, but they got into a fight and she left. So, she's safe, but we haven't heard from him."

Fire still raged a day after the conflagration that destroyed at least 30 buildings, including a packed bar, apartments and all the town's archives.

Relatives in the tourist town of 6,000 full-time residents were already starting to grieve.

At a community centre, Jacques Bolduc and Solange Gaudreault emerged after providing a DNA sample to potentially identify their son, Guy Bolduc, a 23-year-old singer who was performing at the bar.

"Our boy wanted so much to live," Mr. Bolduc told Radio-Canada. "The police told us there is no hope. The train exploded 30 feet from the (Musi-Café) bar."

With more than 2,000 local residents evacuated, Facebook pages are filled with messages from family members desperately looking for loved ones. Many of those still missing are young men and women who were out enjoying the nightlife on a warm summer night.

Bernard Théberge, 44, a cook who lives on the outskirts of Lac-Mégantic, was out with his friends at the Musi-Café, one of the most popular hangouts in town and the last known whereabouts of many of the missing. The Musi-Café is a few metres from where the tracks cross Frontenac Street, Lac-Mégantic's main road.

Mr. Théberge was on the outside patio in front of the café smoking a cigarette when the derailment happened. He said he heard the train coming and knew right away that something was wrong.

"It was going way too fast," said Mr. Théberge. "I saw a wall of fire go up. People got up on the outside patio. I grabbed my bike, which was just on the railing of the terrasse. I started pedaling and then I stopped and turned around. I saw that there were all those people inside and I knew right away that it would be impossible for them to get out."

Mr. Théberge said he tried to help people escape "but there was just fire everywhere."

"I just pedaled away, but I know a lot of people didn't make it out. There were maybe 60 people inside."

"This is a first. Smoking saved my life," he said with a voice raspy from the heat and smoke. His right arm was bandaged due to second-degree burns.