An economical one-pot, three-step reaction sequence of readily available 2-monosubstituted 1,3-diketones and 1,4-benzoquinones has been explored for the facile access of 2,3-dialkyl-5-hydroxybenzofurans. By using cheap K2CO3 and conc. HCl as the reaction promoters, the reaction occurs smoothly via sequential Michael addition, aromatization, retro-Claisen, deacylation, hemiketalization, and dehydration processes under mild conditions in a practical manner. Additionally, an interesting phenomenon was observed during the derivatization studies, where the dihydroquinoline was converted into tetrahydroquinoline and quinoline products, respectively, via a disproportionation process.