Star-studded Manchester City, with their host of top quality players, didn't have it all their own way and it wasn't until the 68th minute that fiery Welshman Craig Bellamy notched the equaliser to cancel out Dunne's 16th minute strike.
Gareth Barry had a mixed reception upon his return to Villa Park but he played a leading role in City collecting a point in a hard fought match.
With Emmanuel Adebayor back for the first time since his three match ban City were looking to the former Arsenal striker to spearhead another impressive performance.
Yet it was City who had a scare in only the second minute when Shay Given had to make a desperate block to keep out a clever flick by Gabby Agbonlahor from Ashley Young's corner.
The feature of the early play was the fast pace of the game with City always moving forward in menacing style.
But there was a dramatic development in the 16 minute. James Milner won a corner on the right and from Stephen Warnock's inswinging kick Dunne, who had shrugged off the attention of Barry, headed Villa into the lead with great purpose and personal satisfaction.
The response from City was positive with Carlos Tevez, playing well behind Adebayor, the main danger as he demonstrated with a long range drive which took a deflection only for veteran Brad Friedel to make a comfortable save.
City turned up the heat and it became a major concern for Villa how easy they were penetrated by some snappy moves often including four or five players.
Fortunately for Villa, Dunne was in outstanding form and he was given solid support by James Collins.
But it took another fine Friedel save to keep out a header from Adebayor following an accurately placed corner by Barry.
Surprisingly, City's defence was not as secure as it should have been as highlighted when Dunne narrowly failed to add to his tally from a Milner corner.
Barry, seemingly aided by the introduction of Stephen Ireland, then began to come more into the game setting up several good attacks but Villa were in no mood to surrender their slender lead as they doggedly defended in depth.
Villa, however, could not survive indefinitely and in the 68th minute Welsh international Craig Bellamy collected a pass from Adebayor to rifle his shot past Friedel.