The Argentine unleashed a devastating right-hand shot that sent Dallas face-first onto the canvas just 156 seconds into the bout at the Hard Rock Hotel.
With Dallas lying motionless, referee Robert Byrd stepped in immediately to call an end to the fight.
''I was so relaxed. I was waiting for my opportunity to land a shot,'' Matthysse said.
''I was waiting for him to throw his left, then he ducked and I connected with the right.''
The win gives Matthysse his 31st knockout and improves his record to 33-2, as well as putting him in with a chance of a bout with WBA super lightweight champion Danny Garcia.
'I want Danny Garcia and all the top fighters at 140 (pounds),'' Matthysse said. ''I hope he doesn't avoid me.''