Premiership favourites St George Illawarra have been brought back to earth by South Sydney after they were upset 24-10 at ANZ Stadium on Sunday.
The Dragons suffered just their second loss of the opening 10 NRL rounds but still held onto top spot.
Anthony Seibold's Rabbitohs produced one of the best defensive efforts of the year to hold out the Dragons and prove their own top four credentials.
Despite having 26 tackles inside the opposition red zone in the first stanza, the Dragons were held scoreless at halftime for just the second time this year.
As a result, the Rabbitohs went into the break up 12-0 and a lucky try to teenage winger Campbell Graham in the 74th minute sealed the four-tries-to-two victory.
The Dragons were frustrated by a seven minute-period in the first-half when they had six sets camped on the Rabbitohs' line, with Seibold labelling it a turning point.
"I thought we got a bit of confidence out of that," he said.
"One thing with the Dragons, anytime they get good field position, they normally go away with some points."
The Rabbitohs remain in fifth spot following their sixth win in eight games and look a revitalised team this year under Seibold.
Despite an error that led to the first of Tyson Frizell's two tries, Sam Burgess had a barnstorming game in his return from a two-week suspension.
Souths backrower Angus Crichton made 188 metres and scored his side's second which made it 10-0 after just eight minutes.
Damien Cook won the battle of the NSW No.9 aspirants with Cameron McInnes, making good metres out of dummy-half and kicking for Greg Inglis' final try.
After Souths led 12-0 at halftime, they dodged a bullet when the touch judges and referees missed an Adam Reynolds knock-on.
To make things worse for the Dragons, Reynolds booted a penalty conversion soon after to make it 14-0.
Dragons coach Paul McGregor said it was a clear knock-on but refused to concede the incident contributed to the result.
"That happens in a game - it was a knock-on, the linesman was there and he missed it," McGregor said.
"That was one. Then it ricocheted off the post and it was a knock-on and they scored the next set. That happens.
"I'm disappointed, yeah. But did that lose us the game? No. Not at all. We lost the game."
Ben Hunt was clearly troubled by a corked leg but is expected to be okay just two weeks out from the Queensland State of Origin team being named.
Jack de Belin played only 27 minute after failing to train all week because of a hip pointer injury.
However McGregor bizarrely refused to clarify what the aspiring Blues back-rower had injured.
"I can't tell you that," McGregor said. "It's on his body."
Australian Associated Press