UPDATE 3-Tennis-Djokovic crushes Davydenko to win Masters Cup

(Releads, adds Davydenko quotes)

By Nick Mulvenney

SHANGHAI, Nov 16 (Reuters) - Serbia's Novak Djokovic crushed Nikolay Davydenko 6-1 7-5 to win the Masters Cup on Sunday, underlining his credentials as a major challenger to Rafael Nadal and Roger Federer at the top of men's tennis.

The Australian Open champion, who lost all his matches without winning a set on his debut at the season-ending shootout last year, earned $1.24 million to move to within 10 ranking points of world number two Federer.

The Swiss defending champion crashed out at the round-robin stage, while world number one Nadal missed the $4.45 million tournament through injury.

"I'm very, very happy," said the 21-year-old Djokovic after kissing the court and tossing his racket and shirt into the crowd.

"It's a great achievement for me. The best eight players playing here says everything about the quality of the event and I would definitely put it on a level with the grand slams."

Having been a model of inconsistency in his earlier matches, the black-clad world number three played almost perfect tennis on his way to winning the first set.

World number five Davydenko, who beat Briton Andy Murray to reach his first Masters Cup final, was bludgeoned into submission by the young Serbian's powerful groundstrokes and sizzling winners.