Swiss world number one Federer reacted in a decisive manner two days after losing his first-ever match in the round-robin stage of a year-end event when he was beaten by Fernando Gonzalez.
"It's a different situation coming back after losing," said Federer. "I'm used to losing, going on, playing maybe two days later in a first round match.
"The only thing here is, you know, you lose and you play another top 10 guy. This was a top four guy - it doesn't get any easier."
Andy Roddick was taking on Gonzalez in what promised to be a duel of cannon forehands.
With victory in just under 90 minutes, Federer's bid for a fourth trophy in five year-end editions remains narrowly on track while Davydenko exits contention after two group defeats.
Federer will need to tighten his game before his last group match on Friday after committing 39 unforced errors against Davydenko on the way to victory, to stand 16-1 in Masters Cup group play in his career.
The Russian, who will lead his nation in the Davis Cup final later this month against the US in Portland, was not overly discouraged.
"It's not impossible to beat Federer," said a man who has never done it. "Sometimes mentally it's tough.
"Today was really tough for me physically. He played very fast. I sometimes played good and then lost concentration on the next point.
"I'm still happy to be on the tour. I don't want to die now after losing against Federer."
The Swiss defending champion lifted his level in the second set after going up a break in the first for 5-3 only to lose the edge.
He still served out the opener after 39 minutes as Davydenko contributed a double-fault to yield the set point which Federer converted.
In the second set, Davydenko, under a cloud for a suspicious summer loss now under investigation for the huge amount of online betting it engendered, fought through to hold 1-1 with a 12-minute game.
Federer took 5-1 command after another Davydenko double-fault, but the Swiss was against unable to move in for the kill against a man he had beaten ten times.
The Swiss let it slip to 5-2 as he lost serve to love, with the Russian following for 3-5.
But Federer slammed the lid on Davydenko as he claimed victory on first match point, letting out an enthusiastic "yes" as the Russian's forehand return sailed over the baseline.
"I just tried to get off to a good start, I actually felt pretty good from the start," said the 12-time Grand Slam champion.
"He was not going to serve bombs all the way through, which allowed me to really get into the rallies from the baseline and try to manoeuvre him around a little bit.
"I missed a few too many backhands at the beginning, but then started to slice nicely and, you know, sometimes take a chance also to let him make some mistakes.
"That was the right play today." By Bill Scott, dpa