After being handed his first start since returning to St Andrew's, Nikola Zigic was soon in the thick of the action in the final third as he wasted a glorious chance from inside the six-yard box when blazing over a Lee Novak cross.
Up the other end, Dean Maguire charged down a clearance from Blues stopper Colin Doyle that almost found its way into the net as the Evostik Northern Premier team looked to pressurise the visitors at Croft Park.
Birmingham were still having the better of the play, with Wes Thomas missing the target after being found by Mark Duffy, but Blyth were relishing the atmosphere in the North-East and with 10 minutes of the first half remaining, they edged in front.
Jarrett Rivers, who netted the decisive goal against Hartlepool United in the previous round, raced into the penalty area before cutting the ball back for Dale to convert past Doyle.
Birmingham tried to find a response before the break but after Thomas had headed off target from a Neal Eardley delivery, they slipped further behind to the non-league outfit.
Dale, who was causing the Birmingham defence countless problems, found his way into the penalty area before drilling a shot past Doyle to leave Blyth 45 minutes from a place in the fourth round.