In the tie of the day in Glenswilly, the home side came from behind at the half time to beat St Michaels' in a low scoring 1-4 to 1-2 game.
Martin Mc Elhinney's goal in the opening half had St Michael's 1-2 to 0-1 up at the break.
Neil Gallagher and Michael Murphy combined to tie the game 1-2 apiece and then Murphy and Gary Mc Fadden pointed to secured the passage of the defending champions into the knock-out stage.
In the other game Kilcar had to beat Bundoran by a 30+point margain to make it through.
Despite their hard efforts and four goals from Ryan Mc Hugh, the 5-15 to 0-3 win at Towney wasn't enough.
In Group two, Ardara's 2-7 to 0-13 draw with MacCumhaills was the point they required to reach the last eight.
In the other game in that section Four Masters beat Glenfin 2-13 to 0-7, The Donegal Town side had already qualified for the quarters.
Groups 1 and 3 will completed there games on Sunday.