"We stopped doing the right things, too many wrong decisions," he said.
"We got the early goal and sat back. We kept on making mistakes and wrong decisions. We gave the ball away far too frequently and we tried to play short passes. You know in derby games they'll be on top and pressurise you if you do.
"After the third goal we capitulated and I don't want that labelled against my team. We had almost 7000 fans and it amazes me that they were clapping them off after losing 5-2. No individual can come out with any credit."
When asked if he would be making changes against Doncaster, especially in light of Robert Snodgrass and Billy Paynter making a behind-closed-doors comeback against Middlesbrough earlier today, Grayson said: "Believe me there will be (changes).
"I've got players sat at home who can come into the reckoning and players on the bench that can come into the reckoning.
"If someone isn't playing on Friday they can have no complaints. One or two players will have to be looking over their shoulders.
"It's one of the lowest points (of his time in charge). You've been beaten 5-2 in a local derby match in front of 7000 of your own fans."