The victim, named as Mark Cooke (23), suffered serious head and facial injuries in the incident at a Luas stop in Rialto.
Mr Cooke, whose family live at Derry Park in Crumlin, was left fighting for his life in St James's hospital.
His condition improved late last night and he was said to be in a stable condition but in an induced coma today.
Garda sources told the Herald that the extremely violent incident had been captured on CCTV.
IT IS UNDERSTOOD MR COOKE HAD BEEN SUNBATHING IN THE AREA AND WAS WALKING BETWEEN THE RIALTO AND FATIMA STOPS WHEN THE INCIDENT TOOK PLACE.
He is believed to have had a bottle smashed over him - he was then stabbed with the broken bottle and kicked and beaten as he lay on the ground.
A bottle was found nearby and was taken away for forensic examination.
Mr Cooke was unconscious when he was taken to hospital.
His family rushed from their Crumlin home to be at his side.
Eye witnesses said there was a large group of young people gathered at the stop from mid- afternoon, many of whom were drinking.
Mr Cooke was confronted at 5.40pm and attacked. He lost a significant quantity of blood and was on the ground when the emergency services arrived.
A pool of blood on the street marked the spot where Mr Cooke was injured after he had been set upon.
Another man, also in his 20s, was arrested and questioned at Kilmainham garda station.
The suspect, from the locality, can be held in custody without charge for up to 24 hours.
Gardai have appealed for witnesses. Officers were carrying out door to door enquiries last night in a bid to establish what happened.
A relative said: "He was just walking along. He was fighting for his life in St James's when he was brought in.
"I don't know how many were involved. He was well known in the Fatima Mansions area."
Mr Cooke's parents, his four sisters and three brothers were anxiously awaiting an update on his condition. A large section of the area around the scene was sealed off by gardai.
An appeal was issued to any Luas passengers, pedestrians or motorists, who witnessed the incident to contact Kilmainham station or phone the confidential line on 1800 666111.