Butragueno demands win over Dortmund
After the first three games of this season's Champions League, Madrid sit second in Group D with six points, one point behind Bundesliga Dortmund.
A 2-1 defeat away to Juergen Klopp's men in the previous round of fixtures leaves Madrid with work to do if they are to qualify for the knockout stages as group winners and Butragueno has said failure is not an option.
"It's a vital game," the former Spain international told Digital Plus.
"We want to be top of the group because the ties in the last 16 can be very complicated if you don't finish first. We cannot fail in this.
"Afterwards, we have to go to Manchester, which will be a very difficult game because (Manchester) City have to win their last three games. We cannot fail in our home matches."
Butragueno praised the contribution of recent recruits Michael Essien and Luka Modric in Madrid's 4-0 Liga win over Real Zaragoza on Saturday.
"It's good news that two midfielders have scored," he said.
"Essien scored a good goal and Modric is becoming more involved and will increase his level. We'll see on Tuesday, which looks like will be very important for us."