Task-oriented dialogue systems—handling transactions, reservations, and service requests—require predictable behavior, yet the moderately-sized LLMs needed for practical latency are prone to hallucination and format errors that cascade into incorrect actions (e.g., a hotel booked for the wrong date). We propose ReacTOD, a bounded neuro-symbolic architecture that reformulates NLU as discrete tool calls within a self-correcting ReAct loop governed by deterministic validation. A bounded ReAct loop enables iterative self-correction, improving accuracy by up to 9.3 percentage points over single-pass inference on MultiWOZ. A symbolic validator enforces action compliance, schema conformance, and coreference consistency on every dialogue state update, achieving a 93.1% self-correction rate on intercepted errors and producing structured execution traces. Incremental state prediction and on-demand history retrieval keep prompts compact, empirically improving instruction adherence in parameter-constrained models. On MultiWOZ 2.1, ReacTOD achieves a new zero-shot state-of-the-art: gpt-oss-20B reaches 52.71% joint goal accuracy, surpassing the previous best by 14 percentage points, while Qwen3-8B achieves 47.34% with only 8B parameters. On the Schema-Guided Dialogue (SGD) benchmark, ReacTOD with Claude-Opus-4.6 achieves 80.68% JGA under fully end-to-end evaluation with predicted domains, and Qwen3-32B reaches 64.09%—demonstrating cross-benchmark generalization without task-specific training data.

Large language models (LLMs) have demonstrated remarkable capabilities in handling complex dialogue tasks without requiring use case-specific fine-tuning. However, analyzing live dialogues in real-time necessitates low-latency processing systems, making it impractical to deploy models with billions of parameters due to latency constraints. As a result, practitioners often prefer smaller models with millions of parameters, trained on high-quality, human-annotated datasets. Yet, curating such datasets is both time-consuming and costly. Consequently, there is a growing need to combine the scalability of LLM-generated labels with the precision of human annotations, enabling fine-tuned smaller models to achieve both higher speed and accuracy comparable to larger models. In this paper, we introduce a simple yet effective framework to address this challenge. Our approach is specifically designed for per-utterance classification problems, which encompass tasks such as intent detection, dialogue state tracking, and more. To mitigate the impact of labeling errors from LLMs – the primary source of inaccuracies in student models – we propose a noise-reduced preference learning loss. Experimental results demonstrate that our method significantly improves accuracy across utterance-level dialogue tasks, including sentiment detection (over 2%), dialogue act classification (over 1.5%), etc.