Abdul Karim Zito’s side suffered a 2-1 defeat at the hands of Rivers United on Sunday but the result was inconsequential they still topped their group with 12 points.
The Ghanaian side looked set to exit the competition when Rivers United came from a goal down to snatch a late victory in Nigeria.
Dreams FC finish top of Group C
However, the result from the other group game between Academica de Lobito and Club Africain favoured them after it ended in a 1-1 draw.
Dreams FC, therefore, progressed to the quarter-finals of the CAF Confederations Cup as winners of Group C despite garnering the same points as Rivers United.
The Still Believe boys topped the group with a superior goal difference, becoming the first Ghanaian side to reach the knockout stage of the competition since 2004.
Dreams FC become first Ghanaian team to reach Confederations Cup knockout stage since 2004
It will be recalled that Hearts of Oak and Asante Kotoko played in the final of the maiden edition of the CAF Confederations Cup in 2004.
Hearts won the competition on that occasion after beating their bitter rivals on penalties to claim the trophy.
Since then, no Ghanaian club has managed to go past the group stage of the Confederations Cup despite numerous attempts.
Meanwhile, Dreams FC will now hope to go further in the competition when they find out their opponents in the quarter-finals.