The three film students were last seen in the municipality of Tonala after their car broke down and they were later kidnapped by at least six people, who tortured and killed them, according to Jalisco state prosecutors.
"Subsequently their bodies were dissolved in acid so that no trace of them remained," the state prosecutors office said.
State prosecutor Raul Sanchez said that two people had been arrested so far in the investigation.
Prosecutors said the youths were confused with members of a another gang by gunmen from the Jalisco New Generation Cartel (CJNG), which has become the most powerful in Mexico, according to US authorities.
Criminal groups in Mexico often kidnap, torture, dismember and even dissolve their victims in acid and many of the remains are dumped in clandestine graves.
International observers objected to the government's investigation and the case shook the administration of President Enrique Pena Nieto, who has seen his popularity decline sharply amid corruption allegations and a spike in violence.
More than 25,000 people were murdered last year in Mexico. Homicides hit their highest level in records going back 20 years.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
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