This was a matchup of one of the most veteran teams in the country -- Notre Dame starts three seniors and two juniors, including reigning Big East player of the year Luke Harangody -- and one of the least experienced. Indiana has two returning players, one a walk-on, and was picked to finish last in the Big Ten as the program tries to recover from the phone-call scandal under former coach Kelvin Sampson.
"I thought we played old today," Notre Dame coach Mike Brey said. "We were mature, took what the defense gave us and made them take tough shots. They're a rebuilding program but he has them competing hard and they'll grow together as the season goes."
The Fighting Irish (3-0) will face Texas (No. 7 ESPN/USA Today, No. 6 AP), which beat Saint Joseph's 68-50, in the semifinals on Tuesday.
"Obviously this is a learning process for us and we learned a lot today," said first-year Indiana coach Tom Crean. "Everything is correctable and we have to continue to grow. We're the youngest team in the country and they're one of the oldest and they played like it."
Jackson was 10-of-17 from the field and had six assists. McAlarney scored all his points on 3-pointers, finishing 6-of-11 from behind the arc.
"The shots came in the flow of the offense," Jackson said. "I will not be taking 17 shots, it just happened."
McAlarney said his teammates were setting screens for him and looking for him.
"I hit the first one I took and started feeling good," he said.
Tom Pritchard had 14 points for the Hoosiers (2-1), who just didn't have the size, speed or depth to stay with their instate rival.
Notre Dame shot 50.7 percent from the field (38-of-75), including 10-of-26 on 3s, while the Hoosiers were 21-of-53 overall (39.6 percent) and just 1-of-12 from 3-point range.
Notre Dame led 44-23 at halftime after shooting 46.2 percent from the field (18-of-39), including 6-of-16 on 3-pointers. The Hoosiers were just 9-of-29 (31 percent) and missed all seven of their 3-point attempts.
McAlarney's 3-pointer with 13:10 to go capped a 7-0 run that gave the Irish a 63-31 lead.
Harangody had 14 points and Ryan Ayers added 13 for the Fighting Irish, who finished with a 43-33 rebounding advantage.
Devan Dumes and Nick Williams both had 10 points for the Hoosiers, who committed 20 turnovers which Notre Dame converted into 31 points.
"We didn't put up enough resistance on the defensive end," Crean said. "Our number one problem was a lack of communication and not sticking to the game plan. As we continue to grow we have to be a lot more physical."
Indiana leads the all-time series between the schools 47-21 and the Hoosiers had won 16 of the last 19 meetings.
Notre Dame finished sixth in 1993 in its only previous appearance in the Maui Invitational. Indiana is making its fifth appearance and the Hoosiers won the tournament in 2002.
This is the second straight season Crean has been in the tournament. He led Marquette to a second-place finish behind Duke in 2007.