Robinho, who has become something of a forgotten man at Eastlands after spending the last few months on loan at Santos, capped a clinical performance by Dunga's team with a brilliant third goal
Chile's exciting attacking style at the tournament has won them many new admirers and have been dubbed everyone's favourite 'other team'.
But their adventure came to an end as they found themselves on the receiving end of Brazil's best performance in South Africa yet.
On this evidence, it will take something special to stop Dunga's boys from going all the way as Brazil moved up another gear.
Chile have been a breath of fresh air under Marcelo Bielsa and they showed they were far from nervous at the prospect of sharing the pitch with the tournament favourites.
Brazil keeper Julio Cesar was forced to make a smart save to deny Humberto Suazo in the 13th minute before the favourites turned on the style.
Gilberto Silva forced a fine stop from Claudio Bravo with a powerful 30-yard effort before Premier League ref Howard Webb waved away strong Brazil claims for a 28th minute penalty.
Webb ignored the appeals after Lucio appeared to have been fouled inside the area by Pablo Contreras.
That only served to upset Brazil, with Kaka, back in the side after serving a suspension, booked for a trip 30-yards from his goal.
But just when their frustrations looked set to boil over, Dunga's side seized control with two goals in three minute before half time.
Defender Juan produced a 35th minute breakthrough with a thumping header following a corner by Maicon.
Chile had barely recovered when they found themselves 2-0 down and heading out of Africa following a lightning counter attack in which Fabiano rounded the keeper after great play by Robinho and Kaka.
Chile came out fighting in the second half and dominated possession before Robinho put them out of their misery.
A stunning 59th minute run from Benfica's Ramires committed defenders and opened up space on the edge of the box for Robinho.
And he showed that he still has magic in his boots as he curled the ball into the top corner of the net, to score one of the best goals of the tournament so far.
Chile were all over the place and were fortunate not to fall further behind after a 35-yard screamer by Daniel Alves as Brazil finally showed their true class after an unspectacular start to South Africa 2010.
Brazil (4-5-1): Cesar; Maicon, Lucio, Juan, Bastos; Alves, Gilberto Silva, Kaka (Kleberson 81), Ramires, Fabiano (Nilmar 76); Robinho (Gilberto 85). Subs (not used): Gomes, Doni, Luisao, Thiago Silva, Melo, Elano, Josue, Baptista, Grafite.
Chile (3-3-3-1): Bravo; Fuentes, Isla (Millar 62), Contreras (Tello 46); Jara, Carmona, Vidal; Gonzalez (Valdivia 46), Sanchez, Suazo; Beausejour.
Subs (not used): Pinto, Marin, Fernandez, Fierro, Orellana, Paredes.
Referee: Howard Webb (England)