The 31-year-old, competing in this tournament for only the second time, led 4-1 and 5-3 but could never shake off Mardle, who had recovered from a similar position against world number one Colin Lloyd on Saturday night.
Mardle had been at least two sets down in all his previous matches at this event and when he pulled back to 4-3 and 5-4 it looked like another brilliant comeback was on the cards.
But Dudbridge, nicknamed ‘Flash’ and the fastest-emerging player on the circuit, always had too much in his locker. Aided by 13 maximum scores of 180, he kept his nose in front and closed it out with a checkout of 80.
Runner-up at the World Matchplay in Blackpool last summer, the Bristolian could have the chance to gain revenge for an 18-8 defeat in the final to Phil Taylor, who was meeting Bob Anderson in the other semi-final.
Meanwhile, second seed Ted Hankey produced a thoroughly professional display against sole American contender John Kuczynski to reach the second round of the Lakeside World Championship in Frimley Green.
The 36-year-old won 3-0 thanks to some impressively high scoring and accuracy on the doubles.
‘The Count’, whose nickname originates from his likeness to Dracula, arrived on stage in trademark fashion, clad in a black cape and tossing plastic bats into the audience.
And the star attraction lived up to his billing as he never looked in any danger of defeat against the qualifier from Pennsylvania.
His next opponent Wagner staged one of three tremendous fightbacks in the afternoon session, triumphing 3-2 against Finland’s Jarkko Komula in an all-Scandinavian tussle.
Two seeds also got out of jail as Tony West came through 3-2 against Holland’s Rick Hofstra, while Martin Adams battled back to beat Davy Richardson by the same scoreline.