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Rio de Janeiro - The Brazilian Football Federation (CBF) says that Dunga and the rest of the technical staff of Brazil's national team have been dismissed after the side's early exit from the World Cup.
A communique issued on Sunday by the CBF says a replacement coach will be appointed before the end of the month.
The decision was widely expected after Brazil was beaten 2-1 by the Netherlands in the quarter-finals.
Dunga returned to Brazil with the team early on Sunday and was met with applause and cheering by fans in his native Porto Alegre in southern Brazil.
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