Nathan Stanton talked himself into a dismissal after just 12 minutes, the defender earning two yellows in quick succession for his reaction to MK Dons being awarded a penalty.
Referee Mick Thorpe awarded the spot kick for Simon Ramsden's challenge on Dean Lewington, but Dale keeper Sam Russell saved Keith Andrews' effort from 12 yards.
Dale then took the lead through skipper Gary Jones after 32 minutes after good work from Callum Higginbotham.
The home side had chances to level, with Aaron Wilbraham heading against a post and Sean O'Hanlon going close with a couple of efforts, but Dale held on for a memorable victory.
What is your verdict on the game? Have your say.
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What a great win. The club sells the prize striker and still beats the league leaders on their patch. Just wonderful