Gareth Johnson proved the difference as Down denied Donegal in this opening-round clash at O'Donnell Park, Letterkenny.
But a Donegal side missing a number of first-team players, put up a creditable performance against their fancied opponents.
With the wind and rain at their backs, Down led by 1-12 to 0-6 at the break with Aidan Clarke firing home the goal and Johnson on song from frees.
Down added a second goal early after the break before Donegal hit back with a goal from Stephen Boyle and points from Lee Henderson to reduce the margin to four points, but a goal from man of the match Johnson pulled Down clear again.
Boyle and Ciaran Dowds were outstanding for Donegal, who meet South Down in the semi-final of the Lory Meagher Cup in Newry next Saturday.
Scorers -- Down: G Johnson 1-7 (5f), A Clarke 2-0, B Ennis 0-3, K McGarry, S Clarke, D Hughes, S Nicholson, A Savage 0-1 each. Donegal: S Boyle 1-2, L Henderson 0-6 (6f), C Mathewson 0-3, P Hannigan, P Horan 0-1 each.
Down -- K Keating; M Hughes, F Conway, J Smyth; K McGarry, C Woods, A O'Prey; A Savage, E Clarke; S Clarke, G Johnson, C O'Prey; D Toner, A Clarke, B Ennis. Subs: S Nicholson for A O'Prey for 51, D Hughes for A Savage 52, S Keith for Keating 58, G Clarke for K McGarry 60, C Mageean for B Ennis 69.
Donegal -- P Burns; M Lillis, C Dowds, S O'Connor; J Boyle, J Donnelly, C Goulding; D White, P Hannigan; M McGhee, E Organ, L Henderson; P Horan, C Mathewson, S Boyle. Subs: N Campbell for Horan 52, R McDermott for Lillis 62, P Sheridan for Goulding 65, C Breathnach for Organ 66.
REF -- R Matthews (Antrim).