They lost 14-19 to France, who repeated their first win over New Zealand from back in April.
The Black Ferns will now meet Fiji in their quarterfinal at 7.28pm on Saturday. Other quarterfinals see France play Canada, Australia meet Japan and the United States play Russia.
In the men's section Fiji failed to make the quarterfinals for the first time at the Dubai tournament.
Fiji missed out on points differential when Argentina and France went through.
On the second of three days at the tournament the All Blacks Sevens had a comfortable win over Canada with Salesi Rayasi having a chance to unleash his speed to complete a hat-trick of tries in their 31-7 win. Joe Webber and Regan Ware also crossed for New Zealand.
In the final pool game against Samoa that was preceded by an acknowledgement from both teams of the measles epidemic in Samoa, the Samoans scored first when Joe Perez broke the defence.
But the All Blacks Sevens quickly resumed control to score six unanswered tries, two of them to Andrew Newstubb for a 40-7 win. Ngarohi McGarvey-Black, Scoptt Curry, Sione Molia and Rayasi also scored.
New Zealand will play the United States at 8.36pm on Saturday. Other quarterfinals see France against England, South Africa against Argentina and Australia against Samoa.
The Black Ferns opened the day against England who went into the game on the back of a 13-game losing streak against them. England got a boost when scoring first through pacey back Celia Quansah but Stacey Waaka showed her own speed when scoring twice, followed by Kelly Brazier for New Zealand to have a 19-5 lead at the break.
England scored first in the second half through Deborah Fleming, but that merely lit the Black Ferns' response as Alena Saili and Shiray Kaka both crossed for tries. Tyla Nathan-Wong had an outstanding record of landing five of six conversion attempts in the game.
Against France, Les Bleus scored first through Serephine Okemba. However, two tries to Brazier gave New Zealand a 14-7 lead at halftime. But early in the second half Okemba scored again with Joanna Grisez scoring soon after and France poured on some determined defence to deny New Zealand a response.