Manchester City plummeted towards the Champions League exit door on Wednesday night, while Real Madrid were beaten by Dortmund, a below-par Arsenal side suffered a loss at home to Schalke and AC Milan fell to Malaga.
Roberto Mancini's Manchester City headed to Ajax knowing they were getting close to must-win territory in Europe, having taken a point from their opening two games. A double-header against the perceived weakest team in Group D provided a potential catalyst for their revival, but City failed to build on Samir Nasri's opener as Ajax won 3-1 thanks to goals from Siem de Jong, Nicklas Moisander and Christian Eriksen.
It took over 20 minutes for City to settle, but a sweet strike from Nasri eased the very evident nerves. James Milner was the man to advance across the edge of the Ajax penalty area, sliding the ball left to Nasri who clipped it first time inside Kenneth Vermeer's far post. However, Ajax netted on the stroke of half-time, De Jong driving an emphatic first-time hit past Joe Hart after arriving onto a right-wing cross.
The visitors tried to press higher up the pitch after the interval, but disaster struck in the 57th minute when Moisander capitalised on some static marking at a corner to glance home. It then got even worse for City ten minutes later as Eriksen dribbled towards the area before seeing his tame shot deflected beyond Hart by Gael Clichy.
Dzeko missed two wonderful chances to cut the deficit for City as Mancini threw on all his forward options, but there was to be no dramatic rescue act this time.
The table makes for grim viewing from a City perspective after Borussia Dortmund beat Real Madrid 2-1 in Germany. Dortmund now top the group on seven points, while Madrid have six, Ajax are on three and City just one.
Robert Lewandowski was the man to make the breakthrough nine minutes before half-time, but the Spanish champions were level two minutes later as Cristiano Ronaldo dinked a beautiful chip over the advancing 'keeper. Marcel Schmelzer settled it for Dortmund, who are looking a real force in this year's competition.
Arsenal still have much work to do if they are to book their place in the draw for the last-16 after they were deservedly beaten 2-0 by Schalke at Emirates Stadium. The Gunners are now second in Group B on six points, one behind the Germans.
Arsene Wenger's side were fortunate not to concede a 14th-minute penalty as Vito Mannone appeared to fell Ibrahim Afellay inside the area, the referee instead booking the Dutchman for simulation. Schalke then carved out a golden chance for Klaas-Jan Huntelaar, but the prolific striker somehow shot wide from six yards.
Schalke missed another significant opening at the start of the second period when Benedikt Howedes wastefully clipped over, with Andre Santos having a particularly bad night for the Gunners. It was no surprise when Huntelaar finally poked past Mannone 14 minutes from time, and then Afellay tapped home at the back post to kill the game off - inflicting Arsenal's second defeat in four days. The good news for Arsenal is that Montpellier were beaten 2-1 at home by Olympiakos, leaving them well adrift of the Gunners. Gaetan Charbonnier netted for the French outfit but they were overturned by Vasilis Torosidis and Kostas Mitroglou.
Elsewhere, Group C continues to belong to Malaga after the Spaniards beat AC Milan 1-0 to move to nine points. A second-half goal from Joaquin ensured Milan - stuck on four points - now face a scrap to make it into the knockout rounds.
Malaga were handed a glorious chance to open the scoring from the penalty spot on the stroke of half-time, but Joaquin - who missed one at the weekend - sent his effort over the bar. However, he made amends just after the hour and that proved enough.
Zenit St Petersburg are one point behind Milan thanks to a 1-0 win over Anderlecht in Russia. Aleksandr Kerzhakov's 72-minute penalty earned Zenit's first victory of the campaign.
And in Group A, Porto are the masters of their own fate after a third straight win kept them top on nine points. Dynamo Kiev were overturned 3-2 at the Estadio do Dragao, with Silvestre Varela scoring for the hosts before Jackson Martinez netted a brace.
Paris Saint-Germain are second on six points after they beat Dinamo Zagreb 2-0 on their travels. Zlatan Ibrahimovic and Jeremy Menez were on the scoresheet for Carlo Ancelotti's side.