Before a bumper Boxing Day crowd of 32,277 against fourth placed Middlesbrough the Reds found it hard to stay in the game and slipped further off the promotion pace.
After reaching half-time all square, Stuart Pearce's side were second best in the second period and went down to goals from George Friend, Jelle Vossen and Grant Leadbitter.
Forest had Kevin Wilson sent off on 67 minutes for a second yellow card and Pearce told BBC Radio Nottingham afterwards that his side were 'suffering with a lack of confidence and composure on the ball at the moment.
"We were hoping to come here and hurt Boro on the break and we had opportunities to do that but couldn't find that killer pass."
The Reds drop to 10th place in the Championship ahead of Sunday's game against Birmingham City at the City Ground.