Mark Warburton's men, previously unbeaten in 19 league games, slipped to a 3-0 home loss at the hands of Wolves, whose sixth successive league win moved them above their opponents by a point.
Having been sent on their way by James Henry's strike just before the break, Wolves' fine success was sealed as Michael Jacobs hit a second-half double.
Leyton Orient are top on goals scored after a brace of penalties from Lloyd James sealed a 2-0 win over Swindon Town.
James made no mistake from 12 yards towards the end of the first half and repeated the trick when his side were handed a second spot-kick seven minutes after the interval.
Preston North End stretched their unbeaten league run to seven games with a 2-1 win over Colchester United.
Brian Wilson's 82nd-minute own goal proved decisive after Jabo Ibehre had cancelled out Tom Clarke's opener.
Rotherham United and Peterborough United, the other two sides occupying play-off spots, put further distance between themselves and the chasing pack with wins.
Both left it late, with Kieran Agard's last-gasp intervention ensuring Rotherham edged out Carlisle United 2-1 and Nicky Ajose striking the only goal in the 76th minute as Peterborough downed Stevenage 1-0.
The latter result leaves rock-bottom Stevenage five points adrift of Notts County, who were leapfrogged by Shrewsbury Town following a five-goal thriller at Meadow Lane.
It seemed County would win the basement battle after going 2-0 ahead in the opening 13 minutes thanks to Jack Grealish and Alan Sheehan.
However, Jon Taylor pulled one back before James Spencer's 44th-minute sending off altered the complexion of the game.
Taylor levelled proceedings midway through the second period, after which David McAllister sealed a 3-2 triumph for Shrewsbury.
Crewe Alexandra moved out of the drop zone with a 3-1 victory at Port Vale, in a match that saw away boss Steve Davis have sons representing either side.
The elder of the Davis brothers, Harry, was able to claim family bragging rights as Crewe saw off a Vale team featuring his sibling Joe.
Crewe's success left Bristol City, who lost 3-0 at Sheffield United, fourth-bottom.
James Hanson provided the decisive strike as Bradford City beat MK Dons 1-0, while one goal was all that Oldham Athletic required to overcome Gillingham, Gary Harkins the man to get it.
Tranmere Rovers put manager Ronnie Moore's recent suspension to one side by beating Coventry City 3-1 and Crawley Town came away from Walsall with a 2-1 win.
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