Forest boss Davies remains a hate figure among Preston followers after he controversially quit the Lancashire outfit to take over at Derby in 2006.
Booed and jeered as he took his place in the visiting dug-out, the fiery Scot's day got steadily worse as Forest fell 3-0 behind by half-time thanks to Ross Wallace's breakaway effort, Callum Davidson's penalty and Matt James' stunning piledriver.
Forest improved vastly after the break and Dexter Blackstrock hit back for Forest with a 57th-minute penalty before substitute Robert Earnshaw cut the gap further with 14 minutes remaining.
Yet there was to be no equaliser for Davies to savour as Forest were condemned to their fifth successive away defeat in the Championship.
Davies' players struggled badly to cope with Preston's first-half vibrancy and could have easily fallen behind inside the opening minute.
Home captain Davidson swung in a teasing cross from the left flank and striker Chris Brown rose unmarked to send a header wide of the post.
It was an early warning sign for Forest but was not heeded in the slightest.
North End began to up the tempo as the half wore on and duly led in the 20th minute after a superb counter-attack.
Neil Mellor embarked on a strong run down the right flank and advanced forward at pace before spotting Wallace unmarked to his left.
Mellor's perfect pass was gratefully received by Wallace, who took one touch to steady himself and another to drill a fierce low shot into the net from the edge of the 18-yard box.
Preston boss Darren Ferguson punched the air in delight and it soon got better for the home side as their advantage was doubled in the 29th minute following a corner from the left by Wallace.
Forest defender Chris Cohen was adjudged to have tugged at Billy Jones' shirt and Davidson dispatched the resultant penalty with a well-struck left-footed effort.
The visitors showed little as an attacking force and in the 32nd minute Preston struck again with a brilliant goal from on-loan Manchester United midfielder James.
James, 18, collected a pass from Wallace 25 yards out and unleashed a venomous right-footed shot which flew into the top right-hand corner.
Preston defender Youl Mawene succumbed to injury in the 41st minute and was replaced by Liam Chilvers before Forest grabbed a lifeline in the 57th minute.
Jones clumsily handled the ball as Cohen threatened to break clear and Blackstock fired home left-footed from the penalty spot.
Forest threw on Earnshaw with 21 minutes remaining and seven minutes later he collected Blackstock's pass and fired past Preston goalkeeper Andy Lonergan from close range.
Forest pushed hard for an equaliser in the closing stages but Preston held on - much to Davies' dismay.
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