The Dons slipped to their first defeat in 13 league matches after going down 3-0 to Walsall at stadiummk.
An own goal from Darren Potter and a brace from Tom Bradshaw saw the Saddlers leave MK1 with the success.
Despite the defeat, Karl Robinson’s men still finished 2014 inside the top four in Sky Bet League 1, just three points behind the automatic places with a game in hand.
The 34-year-old boss, on his 250th game in charge, reverted back to the team that beat Oldham Athletic 7-0 in the Dons’ last home outing – Samir Carruthers and Will Grigg replaced Daniel Powell and Benik Afobe in the starting XI.
But they nor their team-mates could deal with Andy Taylor’s free-kick inside the opening two minutes which was turned into his own net by Dean Lewington.
Carruthers came close to levelling matters just five minutes later but his side-footed 20-yard effort, from Dele Alli’s cut-back, whistled just past the right-hand post.
Carl Baker, presented with the MK News Player of the Month award for November pre-match, then mis-kicked at the crucial time following good play by Dean Bowditch and Jordan Spence, who picked out the winger 15 yards out.
Shortly afterwards, Grigg got away down the right after latching on to Baker’s line ball although his cross-cum-shot was saved by Richard O’Donnell at the near post, before the former saw a speculative effort deflect behind for a corner on 15 minutes.
The Dons continued to push for an equaliser and, after a well-worked corner between Bowditch and Alli, the former curled wide from 20 yards as the clock ticked past the midway point of the first half.
Only a last-ditch block from Paul Downing denied Grigg an equaliser six yards out from Bowditch’s dangerous right-wing delivery on 27 minutes.
Carruthers and Potter stung the palms of O’Donnell in quick succession around the half-hour mark while, at the other end, Tom Bradshaw shot straight at Martin from 15 yards.
Martin thwarted the same man on 42 minutes, pulling off a magnificent save and pushing the striker’s low drive around the post as the Saddlers threatened a second goal on the counter.
Despite a quick start to the second half from the Dons, it was Walsall who almost extended their lead on 48 minutes but Antony Kay was in the right place at the right time to deny Bradshaw from close range.
Jordan Cook then curled an effort inches wide of the right-hand post while, at the other end, Downing stopped a certain goal, heading away in front of the lurking Grigg from Baker’s right-wing cross.
Baker, coming more and more into the game, brought the best out of O’Donnell on 52 minutes after turning his man inside out.
The Dons had the ball in the back of the net two minutes later but Bowditch’s close-range effort was ruled out for offside after Alli’s initial shot had come back off the post.
Dean Smith’s Saddlers continued to look dangerous on the counter and they doubled their lead on 62 minutes when Bradshaw made the most of a defensive mix-up, stealing in and tapping home into an empty net.
Danny Green and Daniel Powell came on, to add to the introduction of Afobe, midway through the second half, but the next chance fell to one of the starters, Potter, who headed narrowly past the post as the Dons looked to reduce the arrears.
However, Bradshaw made sure of the points with his second of the game on 77 minutes, tapping home after substitute Malvind Benning’s initial shot had been saved following a swift counter by the Saddlers.
Starting XI: Martin; Spence, Kay, McFadzean, Lewington (c); Potter, Alli; Baker (Green 67), Bowditch (Afobe 55), Carruthers (Powell 67); Grigg.
Unused subs: McLoughlin, Baldock, Flanagan, Randall.
Attendance: 9,311 (538 away).