With 5:57 to play in the first quarter of Sunday's Game 1, Martin was called for a technical foul after knocking Nowitzki to the ground with a hard bump along the baseline after Nowitzki made his first six shots from the floor.
Nowitzki finished with 28 points and 10 rebounds but shot only 6-for-16 after the hot start. Denver pulled away in the fourth quarter for a 109-95 triumph to take a 1-0 series lead entering Tuesday night's Game 2 at the Pepsi Center.
The flagrant foul is Martin's first of the postseason and, after the upgrade from a technical to a flagrant foul penalty 1, puts one point in Martin's playoff "account." Players who exceed three points receive an automatic suspension for the next game after the three-point barrier is surpassed.
It's believed that Martin's history of hard fouls -- compared to Boston's Rajon Rondo, who escaped punishment for high-profile fouls in the Celtics' first-round series with Chicago -- led to a fine in addition to the reclassification of the foul.
"I voiced our opinion [to the league] that we believe the fine was excessive," Nuggets vice president of player personnel Rex Chapman said Monday night. "With regard to other incidents that have taken place in these playoffs and some of those actions not [resulting in] a fine, we feel that fining K-Mart for this is a bit excessive and inconsistent.
"But we're going to accept it and move on. I think that Dirk was off balance as he often is -- and he's one of the best actors in the game, too -- but that's part of the game."
Mavericks coach Rick Carlisle complained after Game 1 about the free throw disparity, which was 36-13 in Denver's favor. Carlisle specifically protested the fact that Nowitzki earned only five trips to the line, one of them to shoot the technical called on Martin.
"It's hard for me to believe," Carlisle said Sunday, "that we committed 29 fouls and they committed 19."
Nuggets coach George Karl, meanwhile, applauded Martin's foul Monday afternoon before learning of the league's ruling. It was the first overt show of Game 1 physicality after a slow start from the Nuggets, whose active hands and aggression gradually wore the Mavs down, contributing to eight Dallas turnovers in the decisive fourth quarter alone to break open an 82-80 game.
"It was good on film," Karl said of the foul after the Nuggets' brief between-games practice, adding that he didn't see the play in real time because he was preparing to make a substitution.
Karl also volunteered to send tape of the series opener to the league office on the Mavs' behalf, insisting that "our philosophy on [Nowitzki] is not to foul him."
"I think we did a hell of a job of not fouling him," Karl said. Although he conceded that Nowitzki might have absorbed some off-the-ball contact, Karl added: "But on his shots, I don't think he got fouled.''
Martin didn't speak with reporters in Denver on Monday but said Sunday after the win: "It was a foul. I don't think it was tech worthy, but it happens. You can't do nothing about it. It was just a foul."
Marc Stein is a senior writer for ESPN.com.