Defeat in the FA Cup isn't easy to swallow, but its worse when two poor refereeing decisions decided the game.
Howard Webb awarded Manchester United a penalty in the first minute of the game after a Dimitar Berbatov dive following a challenge from Daniel Agger. Ryan Giggs converted to give the home side the only goal of the game.
Liverpool's plight got worse on the half-hour mark when Steven Gerrard saw red for a two-footed challenge on Michael Carrick.
Dalgish's men refused to roll over though and kept up the pressure on the United defence until the end, but were unable to earn the equaliser that they deserved.
A three-match ban for Gerrard will see him miss the Merseyside derby and will be the last thing Dalglish wanted as he looks to turn around the club's season, but he does now have time to work with the squad and make the changes needed for improvement.