Institute's terrible run of form continued, as they slumped to fourth defeat from their last five games, as Dundela moved above them in the Championship table.
Brian Donaghy's side, who started the better of the teams in the opening half hour, were second best for long periods after the break and in truth could have won by a bigger margin, with both the woodwork and goalkeeper John Connolly denying the Belfast men.
The home side were inches away from taking a first minute lead in stunning fashion, but Brendan McLaughlin's spectacular overhead kick from 12 yards, flashed just past Marc Matthews' right hand post.
Stute continued to be the more attacking side in the early stages and Matthews was called into action on 12 minutes, this time the Dundela keeper turned away Aaron McGurk's 20 yard left footed strike.
McGurk went even closer on 25 minutes as his close range strike on the turn was blocked on the line by a back tracking Matthews, after the young keeper had initially fumbled Shaun Doherty's right wing free-kick.
Just after the half hour mark the woodwork came to Stute's rescue as Tony Kane's right wing centre found defender Kyle Owens, but the big skipper's powerful header from close range, which had John Connolly beaten, came back off the post.
Right on the stroke of half-time the visitors took the lead as Tony Kane's in swinging left wing corner picked out Owens, who charged in from the back post to make no mistake, heading home past Connolly.
Connolly had to make a big save early in the second half when got down low to keep out Eoghan McCawl's left footed strike and although Rhys Annett turned home the loose ball, the follow-up effort was ruled out for offside.
Dundela doubled their lead in somewhat fortunate circumstances on 51 minutes Tiarnan McNicholl's close range strike was sliced into his own net by the unfortunate Joel Bradley Walsh.
The Belfast men went close to adding a third just before the hour mark but Eoin Kane's shot through a host of players, whistled just inches past Connolly's left hand post.
McCawl missed a sitter on 63 minutes as the midfielder somehow headed wide from close range, after David McMaster's superb teasing right wing cross had picked out the midfielder at the back post.
Dundela hit the crossbar moments later when left-back Ryan McKay burst down the wing before his cross-cum-shot, which caught out Connolly, clipped the crossbar.
Institute's miserable day was summed up on 78 minutes as they were reduced to ten men, as McLaughlin, who was cautioned in the first half, picked up his second yellow card and was dismissed by referee Diarmuid Harrigan.
Niall Currie's men added a third in the closing stages when substitute Jordan Hughes fired home from close range, after they caught the ten men on the counter attack.
In the closing stages Connolly made some top drawer saves to keep the score-line down when he kept out efforts from McMaster and substitute Taylor Shaw.
Institute: John Connolly, Patrick McLaughlin, Rhys McDermott, Joel Bradley Walsh, Conor Quigley; Oran Brogan (Jack Millar 66), Shaun Doherty, Joshua Busteed (Montel Atoge 74); Brendan McLaughlin, Aaron McGurk, Jamie Dunne.
Dundela: Marc Matthews, Anthony Kane, Ryan McKay, Johnny Taylor, Kyle Owens, Robert Jay Magee, David McMaster, Eoghan McCawl (Eddie Shaw 89), Tiarnan McNicholl (William Faulkner 68), Rhys Annett (Jordan Hughes 68), Eoin Kane (Taylor Shaw 90).
Referee: Diarmuid Harrigan (Derry).