Azarenka came into the event as one of the hottest players on the tour, with three tournament titles, including the Miami Masters. But she ran into a player who is very comfortable on clay.
The Stuttgart tournament is the only event on the circuit to be played on indoor clay.
"I love it. No wind, no sun,'' Dulko said after the only second-round match of the day. "She won a lot of matches this year but I feel confident on clay. Everything worked for me. I was solid but I was also aggressive, especially on my serve. I just believed in myself, that I can beat top players.
"I mixed it up, she is very solid from both sides. I get very motivated for such matches.''
Defending champion Jelena Jankovic of Serbia eased into the second round by defeating Dominika Cibulkova of Slovakia 6-1, 6-1.
Jankovic finished 2008 as No. 1 in the world but she has dropped to No. 4 after a poor start this year. But playing on clay has revived her game and she won a tournament in Marbella, Spain, on the slow surface earlier this month.
"I have been playing well in the last few weeks,'' Jankovic said.
"I expected a tougher match because she's given me trouble before but I served well and I am happy to be back on clay,'' said Jankovic, who is now 3-1 against Cibulkova.
Jankovic will next play Sabine Lisicki of Germany, who defeated Patty Schnyder of Switzerland 6-4, 6-3. Lisicki is coming off her first career title, which she won in Charleston, South Carolina.
When Jankovic won last year, the tournament was still played on a hard indoor surface, before changing to clay.
Fifth-seeded Svetlana Kuznetsova of Russia beat German qualifier Andrea Petkovic 6-4, 5-7, 6-1 in the first round.
Kuznetsova wasted a match point in the second set against the 143rd-ranked Petkovic, who is seeking to break into the top 100 again after missing nearly the entire 2008 season with torn knee ligaments.
Kuznetsova then double-faulted to give Petkovic a break and a 6-5 lead in the second set, and the German clinched her set point with an ace. But the Russian bounced back and won the next five games before wrapping up the match.
"I didn't have the patience or the experience in the third set,'' Petkovic said.
Kuznetsova is a three-time semifinalist in Stuttgart, also when it was on a hard surface.
"I had too many ups and downs, especially in the second set,'' Kuznetsova said. "I am quite disappointed with myself.''
Also in the first round, Nadia Petrova of Russia, last year's runner-up in Stuttgart, defeated Zheng Jie of China 6-4, 5-7, 6-4, Daniela Hantuchova of Slovakia beat Alize Cornet of France 6-3, 6-1 and Flavia Pennetta of Italy beat Anna Chakvetadze of Russia 6-2, 6-0.
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