Both Ivan Almeida and Jeff Xavier stood out as the Islanders, who led by as many as 26 points, stayed perfect with a 2-0 mark.
Almeida finished with game-highs of 25 points and 7 rebounds for Cape Verde, while Xavier came off the bench to contribute 24 points.
Algeria got off to a good start, but Cape Verde weren't prepared to give away the top of the group.
The North Africans led by four early on before Luis Magalhaes' team started doing what they do best: hit three-pointer after three-pointer to cruise to victory.
Turning Point: As soon as Xavier came off the bench, the Algerians struggled to cope with his ball handling as well as his quickness in attacking the basket.
Stats Don't Lie: Cape Verde's 10 three-pointers made a significant difference in the final outcome of the game.
Game Hero: Xavier and Almeida were both game-changers.
The Bottom Line: Heading into Group D's last game on Monday against AfroBasket debutants Zimbabwe, Cape Verde showed just why they should be taken into account when it comes to talking about contenders in the Final Phase. The Algerians will take on Cote d'Ivoire for second place in the group.