Town were punished for a below-par second half display at Butlin Road when they lost out to their fellow promotion rivals Quorn.
Having taken an early lead through Danico Johnson, the hosts went on to control the majority of the first period, only to see Quorn strike three times after the interval with Valley unable to offer little in return.
Keenah Rosser returned to the starting line-up after a three match absence, with Caine Elliott also back in from the off.
Rugby started the game well and fully deserved their thirteenth minute opening goal, which came when Loyiso Recci's drilled pass found Johnson on the edge of the penalty area, and he fired his shot past Max Culverwell into the bottom corner.
The home side continued to control affairs, with Culverwell saving a low strike by Dylan Parker, before Jamal Clarke missed a gilt-edged opportunity to double Town's advantage when his diving header to Parker's cross flew just over the bar.
Johnson had another well-struck effort blocked, although the visitors did start to show signs of making a game of it with a decent end to the half - which included a good low save from Matt Hill to Micah Jebbison's downward header.
The new period was only three minutes old, when Quorn got themselves level after Rosser was punished for a poor touch to ultimately allow Lee Marshall a run on goal before he flicked the ball over Hill.
The two teams traded half chances for the next quarter of an hour, with Valley's Ryan Seal sending a shot wide and Stephen Hart's long ranger for the away side the best of the respective bunches.
The turning point came on the hour when Culverwell pulled off a top drawer save to push Rosser's rising strike onto the woodwork, with Quorn then soon edging in front at the other end when the unchallenged Hart headed home Rackeem Reid's cross.
Charlie Evans did put one into the side netting for Rugby, but it was a rare moment of threat, before the visitors put the game out of reach when Hart grabbed his second after following up on Hill's parry to Jebbison's shot.
Deon Meikle nearly added his side's fourth when his effort was cleared from the line by Liam Francis, with Town sub Kurtis Revan also missing out on two late opportunities to pull one back.
Line-up: Hill; Clarke, Francis, Recci; Rosser, Evans, Elliott (Revan), C.Thomas (Marsden), Seal; Parker, Johnson. Subs not used: Hancocks, L.Thomas, Padmore. Booked: Francis.
Quorn line-up: Culverwell, Henchcliffe, Scanlon, Oshungbure, Chapman, Meikle, Reid, Dale, Whyman, Hart, Jebbison. Subs: Rowland, Ebanks, Brown, Brothwell, Marshall.