Real virtually secured their place in the quarter-finals of the Champions League on Wednesday night with a stunning demolition of the German side in Gelsenkirchen.
The nine-time winners had only won once before in 25 trips to Germany but victory was never in doubt at the Veltins-Arena, with Real's most potent attacking weapons coming to the fore.
Karim Benzema, Gareth Bale and Cristiano Ronaldo all scored twice as an insatiable Madrid left Schalke requiring a miracle at the Bernabeu in three weeks' time despite Klaas-Jan Huntelaar scoring the goal of the night in time added-on.
"We played a very, very good match," said Real coach Ancelotti. "We got well into the match, scored two early goals and that opened the game and left us able to counter and to use the speed of our players.
"That was Bale's best game of the season."
Goals from Benzema and Bale gave a Real a two-goal lead after 21 minutes, but in between Iker Casillas pulled off a stunning save from Julian Draxler.
Jefferson Farfan sent a long cross that was slightly deflected and Draxler pounced from close range, only to see Casillas react with a fine reflex stop.
"It was an incredible save, maybe the crucial moment of the match," Ancelotti added. "It protected our lead."
Schalke's Julian Draxler admits the second leg will be a dead rubber and said: "The difference in class was clear. We can forget about the second leg and concentrate on the Bundesliga."
Defender Benedikt Hoewedes said: "We made too many mistakes. Real were in a different class."