Cristiano Ronaldo took up a loose ball and drove past several players across goal to open up the angle and drill the ball right-footed past Xerez goalkeeper Renan at his near post on 49 seconds.
Real put out a team worth Ã‚Â£220 million against a side built for virtually nothing Ã¢â‚¬â€œ containing nine loanees and two free transfers Ã¢â‚¬â€œ and were only prevented a second by a superb Renan double save.
Kaka laid the ball off for Ronaldo to hit a venomous strike from the edge of the area that was pushed away low down by the goalkeeper, the ball fell into the path of Raul and he was denied by a fantastic reflex save that rebounded out to Kaka eight yards out, but the Brazilian dragged his effort wide of the post.
Xerez, however, managed to forge an attack of their own and were awarded a free-kick 20 yards from goal.
Ageing Spanish midfielder, Viqueira, had Casillas beaten but his curling strike clipped the top of the bar and went out for a goal kick.
Renan was called into action again on 20 minutes. KakaÃ¢â‚¬â„¢s corner found the head of Sergio Ramos Ã¢â‚¬â€œ returning to the side following an injury Ã¢â‚¬â€œ and his powerful header was tipped over the bar.
Despite RealÃ¢â‚¬â„¢s dominance they continued to showcase their much-maligned defensive frailties by playing several sloppy passes at the back.
Kaka and Ronaldo appear to be enjoying a good understanding and were the focal point for all of MadridÃ¢â‚¬â„¢s attacks, but the home side failed to threaten the Xerez goal and French striker Karim Benzema appeared to go missing for the entire half.
Xerez Ã¢â‚¬â€œ in what was their first-ever meeting with Real Madrid Ã¢â‚¬â€œ managed to force more than their fair share of corners, but couldnÃ¢â‚¬â„¢t make them pay in the first half.
Ronaldo sprung from the blocks again in the second half Ã¢â‚¬â€œ drilling a shot wide just 26 seconds after the restart.
The 75,000 in the stands at the Bernabeu began to lose patience with their galacticos as the game entered the final 15 minutes with the score still at 1-0.
Los Blancos looked to their Ã‚Â£80 million man for inspiration, and the Portuguese winger didnÃ¢â‚¬â„¢t disappoint.
A corner played in by substitute Granero on 75 minutes saw Ronaldo rise high to power a header into the far corner and give his side a two-goal cushion with his sixth goal in four games in the white of Madrid.
Real needed a win by a five goal margin to overtake rivals Barcelona at the top of La Liga and, despite the infancy of the season, the fans demanded it.
Their team took notice and just three minutes later, Real grabbed a third.
Second-half substitute Guti smashed home from 12 yards after a mis-hit by a desperate Benzema from RonaldoÃ¢â‚¬â„¢s pull back.
The goal saw the end of RonaldoÃ¢â‚¬â„¢s evening as he was replaced by Ruud van Nistelrooy Ã¢â‚¬â€œ returning from a 10-month injury lay-off Ã¢â‚¬â€œ and given a standing ovation.
Madrid scored a third goal in the space of five minutes to make it 4-0 and it was Benzema who finally got off the mark for Los Blancos.
It looked like the weight of the world had just been lifted from his shoulders as he finished emphatically after a clever stepover inside the box on 82 minutes.
The home side refused to yield in their quest for a fifth and it came in the final minute.
A precise pass by Guti found the feet of van Nistlerooy who proceeded to place the ball between the legs of Renan to send Real to the top of the La Liga table, but most importantly above arch-rivals Barcelona.
Real: Casillas, Sergio Ramos, Albiol, Garay, Marcelo, Lass, Gago, Ronaldo (van Nistlerooy, 79), Kaka (Guti, 69), Benzema, Raul (Granero, 60)
Xerez: Renan, Francis, Aythami, Casado (Momo, 59), David Prieto, Moreno (Abel, 74), Viqueira, Alex, Carlos Calvo, Armenteros, Maldonado (Antonito, 67)
Man of the Match: Cristiano Ronaldo Ã¢â‚¬â€œ Fantastic goal in the first minute and his second sent Real on their way to surpass Barca at top spot.
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