The Iron went down to a second home defeat in a week as United succumbed to a 3-0 defeat.
Two goals from Luke Chadwick in the first half put the Iron on their way to defeat before Alan Smith wrapped the game up for the visitors midway through the second half.
It could have been worse had it not been for Iron goalkeeper Sam Slocombe, who saved a Chadwick penalty and made countless saves to keep the score respectable in what was a disappointing day for the Iron.
Scunthorpe made four changes on the back of their 3-2 defeat to Preston, including a first start in a league game for 18 months for Michael Collins in midfield.
Also coming in for United was Josh Walker, David Mirfin and Connor Jennings. Making way for the quartet was Robbie Gibbons, Jimmy Ryan, Niall Canavan and top scorer Leon Clarke who missed out with illness.
In goal, Sam Slocombe remained with a defence of Christian Ribeiro, Mirfin, Paul Reid and Tom Newey.
The midfield consisted of Josh Walker, David Prutton and Collins while the Iron went with a front three of Connor Jennings, Karl Hawley and Mark Duffy.
The substitutes meanwhile were made up of James Severn, Callum Kennedy, Jimmy Ryan, Mike Grella, Robbie Gibbons, Niall Canavan and Jordan Keegan.
Scunthorpe were quick out the traps with an energetic front three and it was one of them, Mark Duffy, who nearly gave United the lead.
The winger picked the ball up on his favoured right wing before beating two players with one jink and smashing the ball at the goalkeeper's far corner.
The shotstopper though remained big and tipped his effort over the bar with his shoulder.
However, with just 18 minutes on the clock, MK Dons took the lead with a helping hand from the Iron keeper.
A dangling cross from Dean Lewington missed everyone in the box with Slocombe under no real pressure.
However, with a slight breeze, the ball seemed to evade the Iron keeper who could only claw the ball out straight into the path of the unmarked Chadwick who tapped in from close range.
United nearly equalised though two minutes later but after the MK Dons keeper fumbled the ball from a corner, it was the MK Dons who reacted quickest clearing a few yards away from the goal-line with an Iron player approaching.
With thirty minutes gone it got bad to worse from the Iron when Chadwick got his second but this time their was no luck involved.
This time Chadwick received the ball twenty yards out from goal before bending a lovely curling effort towards Slocombe's top left hand corner. The ball going in off the bar and into the net to give MK Don's a two goal advantage.
Powell nearly made it three in the 37th minute but despite only having Slocombe to beat Powell could only scuff his shot into the ground giving Slocombe an easy save.
MK Dons made a change shortly after with Powell being withdrawn with a hamstring injury following his run, he was replaced by Adam Chicksen.
Anthony Kay was awarded the first yellow card three minutes into the second half when Kay was adjudged to have used his arm going up for a header with Duffy.
Walker had the Iron's first effort of the second half but his speculative volley from 25 yards was comfortably caught by Martin.
Walker had another effort at goal a couple of minutes later but his long range free kick went harmlessly over the bar.
The MK Dons netted their third with an hour played through former England player Alan Smith. After a corner wasn't dealt with by the Iron defence the ball eventually fell into the path of Smith who bundled the ball home.
The Iron made their first sub four minutes later when David Prutton was replaced by Mike Grella.
Chadwick nearly had his hat-trick in the 71st minute but his 20 yard curling shot from the left despite beating Slocombe, could only go a yard wide of Slocombe's left hand post.
Ryan entered the game on the back of that effort coming on for Connor Jennings.
Alan Smith was the next man withdrawn for MK Dons when he was replaced by Ryan Lowe.
MK Dons were awarded a penalty with seven minutes to go when Ribeiro brought down Balanta in the box.
Stepping up for his hat-trick was Chadwick but unfortunately for Chadwick, Slocombe was even to his effort palming away his weak effort at his left hand post.
Chadwick was next to be brought off by MK Dons being replaced by Jay O'Shea.
Slocombe had to be at his best in the final minute to palm away a Lewington free-kick in the top corner to keep the deficit at three.
Scunthorpe United: Slocombe, Ribeiro, Mirfin, Reid, Newey, Collins, Walker, Prutton (Grella, 64), Duffy, Hawley, Jennings (Ryan, 70).
Substitutes not used: Severn, Kennedy, Gibbons, Canavan, Keegan.
Milton Keynes Dons: Martin, Otsemobor, Lewington, Williams, Gleeson, Potter, Smith (Lowe, 74), Powell (Chicksen, 37), Kay, Chadwick (O'Shea, 85), Balanta.
Substitutes not used: McLoughlin, MacDonald, Alli, Doumbe.
Iron Bar and sponsors man of the match: Mark Duffy.
Attendance: 2,737 (164 away).