TORONTO, March 12 (Ticker) -- If the Indiana Pacers want to make the playoffs, they have to start beating the teams that aren't going to make the playoffs.

The Pacers dropped another winnable game, losing a late lead in a 93-89 loss to the Toronto Raptors, who received clutch shooting in the final seconds from Mike James.

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Morris Peterson scored 25 points and Chris Bosh added 24 for the Raptors (22-41), who broke an NBA record by making a 3-pointer in their 596th straight game. They also broke the spirit of the Pacers, who have not been good against bad teams.

"You can't look at their record. They've been a problem for us the last two years," Pacers coach Rick Carlisle said. "We did some good things to put us in a strong situation and made some mistakes."

Indiana (31-29) blew a 13-point lead and fell to 0-2 this season vs. Toronto, which has labored at the bottom of the Eastern Conference all season. The Pacers also are 0-3 vs. Atlanta, another of the conference's worst teams.

As a result, Indiana is busy fending off advances from Washington, Philadelphia and Milwaukee instead of challenging Cleveland (36-28) for fourth place - and home-court advantage in the first round.

"We don't look at their record. They just make more runs than we do down the stretch," Indiana Pacers guard Jamaal Tinsley said. "Guys tend to hit shots that they usually don't hit. I don't think we underestimate nobody."

The Pacers, who have not missed the postseason since 1997, led for most of the fourth quarter and opened an 89-86 advantage with 1:52 to play on a driving layup by Stephen Jackson, who scored 26 points.

But Indiana did not score again as Toronto made all the big plays down the stretch. With the shot clock winding down, Peterson - who sank the record-breaking 3-pointer in the first quarter - drained a tying 3-pointer with 1:29 to play.

"I saw the shot clock running down and Peja (Stojakovic) let me go left and I tried to create some space and get the best shot possible and it went down," Peterson said.

Bosh missed a running hook but stole the ball from Stojakovic on the next possession. That set up James, who drained a jumper to give the Raptors a 91-89 lead with 8.3 seconds left.

"I turned the ball over in a crucial moment," Stojakovic said. "That mistake was huge at that time of the game and James hit a big shot."

"When I saw the clock running down and I had Jeff Foster on me and there was like six seconds left on the shot clock, so I got to step up and take the shot and hope," James said.

Rookie Charlie Villanueva blocked a pull-up 10-footer by Anthony Johnson, and James sealed the win with two free throws with 2.3 seconds remaining.

"We needed a big defensive stop, guys played good defense and I saw Anthony Johnson had his back to the basket and that was my opportunity to sneak in a block," Villanueva said.

James scored 21 points for Toronto, which had lost three in a row and nine of 10.

Jeff Foster had 19 points and 16 rebounds and Stojakovic scored 18 points for the Pacers, who have lost three of four. Five of Indiana's last six games have been decided by four points or less.

A 3-pointer by Johnson gave the Pacers a 59-46 lead early in the third quarter before the Raptors rallied behind Bosh and James to forge a 73-73 tie late in the period.

Peterson, who has the most 3-pointers of any Toronto player during the streak, set the record with a shot from the arc at the 1:40 mark of the first quarter.