DeGraw and his professional dance partner Karina Smirnoff fell into the bottom two along with actor Jaleel White and Kym Johnson after receiving the lowest scores from judges and viewer votes.
When placed in the bottom two DeGraw admitted: "Karina and I... have a couple of the steps down. Jaleel's more talented than I am."
For the first time, ever the bottom two couples participated in a Dance Duel, a "last chance for salvation" for the contestants to keep their place in the competition.
DeGraw told host Brooke Burke Charvet following his elimination: "It's been amazing just being a part of this show. Karina Smirnoff was a great mentor. Getting to reach out and meet all these amazing people who are aprart of the show has been amazing."
"I had the most amazing time, thank you."
Train performed their latest single 'Drive By' from their new album California 37, while percussionist Sheila E gave a rousing performance during the Macy's 'Stars of Dance' segment.
Selena Gomez also made an appearance later in the night, singing her new single 'Hit the Lights'.
Maria Menounos and Derek Hough, the first couple to be announced as safe, were chosen by judges for an encore performance.
Hough surprised judge Carrie Ann Inaba with a surprise kiss similar to the one he shared with Menounos on Monday night.
Dancing with the Stars airs Mondays and Tuesdays on ABC.