The Eagles' academy side nearly pulled back a three goal disadvantage to snatch a draw at Birmingham City but just missed out on completing a miraculous comeback.
Palace started sluggishly and were behind just 37 seconds into the game when they were caught out down the right flank and after a cross was spilt by Oliver Pain, Blues striker Kyle McPharlane had the simple task of knocking the ball in from a couple of yards out.
That setback could have deflated the Eagles but they saw plenty of the ball following the early blow and after lots of pressure they thought they'd levelled when Corie Andrews and the Birmingham goalkeeper were involved in a 50/50 challenge that saw the ball end up in the net, but unfortunately for Ken Gillard's side the goal was chalked off by the referee.
Having created a couple more chances Palace looked to be heading into the break just one goal down but seconds before half-time a well-crafted attack down the left saw the ball pulled back to Wes McDonald who finished well to put the impressive hosts in control.
In the second half Palace were more positive and pushed another man forward alongside Andrews to try and find a way back into the game, but the killer goal came 10 minutes after the restart when the Eagles lost possession on the halfway line and City broke away with Khaellem Bailey adding the third.
However five minutes later the deficit was reduced to two when Aaron Bissaka was pulled down inside the area as he charged towards goal, and Will Hoare found the net at the second attempt after his spot-kick was saved but the midfielder was on hand to tuck away the rebound.
It was game on with 11 minutes remaining when the referee awarded Palace a second penalty when Andrews was sent tumbling by the goalkeeper and this time Michael Phillips took on the responsibility, sending the shot-stopper the wrong way from 12 yards.
That set up a grandstand finish and with their opponents on the ropes Andre Coker fired over before being denied by a good save, and late on Jacob Berkley-Agyepong also had an opportunity to score but couldn't find the equaliser Palace's second half performance probably deserved.