Virtue, from London, Ont., and Moir, from Ilderton, Ont., scored 76.33 and were 2.56 points behind American rivals Meryl Davis and Charlie White.
Kaitlyn Weaver and Andrew Poje of Waterloo, Ont., were seventh with 65.93 points.
Alexandra Paul of Midhurst, Ont., and Mitchell Islam of Barrie, Ont., were 18th with 55.91 points, which was good enough to move on to Monday's free dance.
Davis and White, silver medallists in Vancouver, beat Virtue and Moir by nearly 10 points in the team event —by far the largest margin of victory over the Canadians.
Moir summed it up by saying: "We got smoked."
The two teams, who have won every major international title since the Vancouver Games, train at the same rink in Canton, Mich., and share a coach in Russian Marina Zoueva.
Russia or the Soviet Union dominated Olympic ice dance for years, claiming seven titles since the discipline was added to the Olympic lineup in 1976.
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