R D.
Yelp
When I visited Hamburg, I looked for a cheap place to stay and the Hall of Dreams 25-bed dormitory at Instant Sleep fit the bill. The hostel is about a 12 minute was from the S- and U-bahn station Sternschanze (although the walk seemed longer with all our luggage) and there is a grocery store along this route in case you want to pick up something to eat or drink.
Since my expectations were low, I was pleasantly surprised by the 25-bed room. There were no bunk beds and the room is long and narrow and goes around a corner so only 5 or 6 beds were visible from mine. I had no trouble sleeping, but the rooms are located over a bar so it can be loud pretty late into the night.
In general, the hostel seems to operate on a low-cost, low-service philosophy. You make the bed yourself, there is no breakfast, towels are extra. However, the staff is willing to help out if you need something and the necessities seem to be taken care of. When we arrived, the toilets in the Hall of Dreams were out of order and we had to use the downstairs bathroom, but it was back in operation the next day.