The Sky Blues suffered defeat at Stadium MK on Tuesday night to exit the Leasing.com Trophy in the second round.
Goals in the second half from Kieran Agard and Joe Mason handed MK Dons a 2-0 victory despite the hosts finishing the game with 10-men.
There was a positive note for City however, with Jodi Jones making his first appearance for the club in more than 12 months.
A mistake from MK Dons goalkeeper Lee Nicholls handed the Sky Blues the first chance of the game on three minutes when Gervane Kastaneer pounced on the keeper’s poor pass before crossing for Amadou Bakayoko who headed narrowly over the crossbar from close range.
The Dons had the ball in the back of the net shortly after only for Agard to be flagged for offside.
City responded with a chance of their own when Callum O’Hare’s effort from the edge of the penalty area went wide of the post.
The Sky Blues continued to search for the opener and almost found it on 17 minutes when Jordy Hiwula was played through on goal by Kastaneer but could only find the side netting from a tight angle.
MK Dons then created a chance of their own with Jordan Houghton shooting wide of Ben Wilson’s goal from distance.
Wilson was called into action shortly after when he made a start stop with his legs to deny Mason the opening goal.
Captain for the night Morgan Williams made a superb block to prevent Agard from pulling the trigger on the half an hour mark as both teams traded chances.
The hosts continued to press for the opener when Hiram Boateng headed tamely wide from inside the penalty area.
Williams then saw his optimistic effort from 30-yards out pushed away by Nicholls after a fine break up-field by the centre-back.
The best chance of the half fell to Kastaneer on 38 minutes when Bakayoko cleverly flicked the ball into his path only to be denied by Nicholls who did well to stay tall.
Brandon Mason was next to try his luck but saw his free-kick from 20-yards out go over the crossbar.
Just before half time, Mason’s inch perfect cross picked out Bakayoko at the far post with the striker’s header acrobatically tipped onto the post by Nicholls.
HALF-TIME: MILTON KEYNES DONS 0-0 SKY BLUES
MK Dons carved out the first opening of the second period with Mason once again denied by Wilson from a tight angle.
The Sky Blues had their first chance of the second half just before the hour mark when Jamie Allen’s whipped free kick was headed over the bar at the back post by Declan Drysdale.
The hosts took the lead on 61 minutes when Agard turned the ball home from point blank range after Bailly Cargill nodded the ball back into his path.
City almost replied immediately when the ball fell to Hiwula at the back post with Nicholls equal to the forward’s half-volley from close range.
However, a precision through ball from Conor McGrandles found Mason who finished well into the bottom left corner from the right-hand side of the penalty area.
That goal saw the introduction from the bench of Jones who was making his first Sky Blues appearance in over 12 months.
With eight minutes left to play, Wilson denied Mason’s effort from the edge of the penalty area.
Substitute Brennan Dickenson then saw red on 85 minutes after picking up a second yellow card when he unnecessarily followed through on Williams.
Joe Walsh headed the ball onto his own crossbar in the final few moments but City couldn’t quite find the goal they needed to get back into the contest.
FULL-TIME: MILTON KEYNES DONS 2-0 SKY BLUES
Goals: Agard 61’, Mason 71’
Yellows: McGrandles 57’, Gilbey 58’, Kastaneer 75’, Dickenson 80’, 85’, Watson 80’
Reds: Dickenson 85’
Attendance: 1,686 (544 away)
Milton Keynes Dons XI: Lee Nicholls (GK), George Williams, Joe Walsh, Bailly Cargill, Dean Lewington (C), Jordan Houghton, Alex Gilbey, Conor McGrandles (Kasumu 74’), Hiram Boateng (Dickenson 74’), Kieran Agard (Bowery 86’), Joe Mason
Unused Subs: Stuart Moore (GK), Regan Poole, Dylan Asonganyi, Matthew Sorinola
Sky Blues XI: Ben Wilson (GK), Tennai Watson, Morgan Williams (C), Declan Drysdale, Brandon Mason, Josh Eccles, Jamie Allen, Callum O’Hare (Shipley 60’), Gervane Kastaneer (Jones 77’), Jordy Hiwula, Amadou Bakayoko (Biamou 77’)
Unused Subs: Marko Marosi (GK), Joe Newton, Zain Westbrooke, Will Bapaga