The 24-year-old elite international came into the 180-kilometre contest as an underdog but surprised many seasoned professionals with a well-timed attack.
The JLT-Condor rider crossed the finish line 14 seconds ahead of Gruff Lewis (Madison-Genesis) with Chris Lawless (also JLT-Condor) 10 seconds further back.
A delighted Dunne said: “I don’t win many bike races so it was nice to get my hands in the air for a change. I’ve been working really hard for the last couple months and there have been moments where I felt something might happen but nothing came of it. But this was my day.
“The Rutland is a race where you just hang in there and I felt I had the legs to do something with 30 kilometres to go so I just bided my time.”
Dunne launched his attack after team-mate Russ Downing had been reeled in and his acceleration thinned down the lead group considerably. Then he made his play for the front down the final kilometre.
“I just attacked and got a gap pretty quickly,” he recalled.
“I went as hard as I could, I pulled out a gap and just held it to the line.
“It was a perfect race and a perfect way for me to win,” he added.
Meanwhile, Ireland’s Dan Martin was unable to better his third-place finish at Fleche Wallone in yesterday’s Liege-Bastogne-Liege.
The Irishman suffered in the final climbs of the 253-kilometre race, finishing 47th in a group 1:56 behind Wout Poels of Team Sky.
Martin’s team worked tirelessly for him and co-team leader Julian Alaphilippe all afternoon.
But it was an attack from Colombian Carlos Betancur with 10 kilometres remaining that ended Martin’s dreams of a podium place.
“Honestly, I wouldn’t change anything I did today,” said the 2013 winner.
“I just missed some power in the legs at the finish, as the cold took its toll on me.
“All of the sudden my legs stopped working and I had no more power left, so I got dropped,” said a rueful Martin.
Poels won a four-up sprint to the line from Swiss rider Michael Albasini (Orica-GreenEDGE), Rui Costa (Lampre-Merida) and Samuel Sanchez (BMC Racing team).
Elsewhere, Eoin O’Connell stormed to a fabulous victory in the feature event at the Drumm Cup in Kerry yesterday.
The Killarney CC man was in flying form and spent much of the day up the road, taking the prime on the way to his first victory as an A1 rider.
He came in ahead of Cathal Moynihan (Manor West Hotel, Tralee/iBike) and John Hodge (Kingdom Endurance/Moda Sports).