Danico Johnson scored first for leaders Rugby Town against third-placed Quorn on Saturday and led 1-0 at half time. But their visitors scored three goals after the break as Valley were punished for a poor second half display at Butlin Road.
Rugby's five-match winning run was brought to an end by their promotion rivals in a disappointing result following the good win against Deeping Rangers.
Shepshed Dynamo are back at the top of the UCL Premier Division on 44 points (17 games) with Rugby and Quorn chasing on 42 but both having played 22 games. Fourth-placed Holbeach are just a point behind and have only played 19 games.
This week Rugby Town have two away games, with a trip to Rothwell Corinthians on Tueday (January 21) and then Cogenoe Town on Saturday.