Paraguay beat Brazil 4-3 on penalties after 1-1 draw on Saturday, to advance to a Copa America semi-final against Argentina.
Robinho scored a solo effort in the 15th minute to put Brazil ahead before Derlis Gonzalez equalised with 20 minutes to go when he converted a penalty after a Thiago Silva hand ball.
Brazil, who had won 12 of their previous 13 matches since Dunga took charge after last year’s World Cup fiasco, had more possession in the first half and weaved some good attacks but Paraguay were quick and dangerous on the break.
In the shootout, Brazil’s Everton Ribeiro sent his shot wide and another substitute, Douglas, missed their fourth to give Paraguay two penalties to settle the outcome.
Santa Cruz then skied his penalty, Philippe Coutinho gave Brazil hope by netting his but Gonzalez made no mistake.
Hosts Chile meet Peru in Monday’s other semi-final.