The Iron trailed 3-0 at half-time after a poor opening 45 minutes, in which the home side looked sharper and fitter. but took the tie to extra time thanks to a comeback which was sealed with two goals in stoppage-time.
Then two stops from keeper Sam Slocombe helped secure a 7-6 shootout win in the standout result of the opening round of the competition.
It seemed plain sailing for Derby as summer signing Michael Jacobs laid on three first half goals, providing the corner for Richard Keogh to head in the first after 29 minutes.
He the picked out Jake Buxton with a free-kick to head in after 33 minutes and flicked the ball through for Theo Robinson to tap in from point-blank range six minutes later.
The Iron came out looking to restore pride after the break. Andy Barcham started the fightback when he cut inside, beating two defenders, before slotting the ball home with a side-footed effort.
Derby thought they had quelled the Iron's fightback two minutes later when Buxton headed in his second of the match, again from a Jacobs free-kick.
Mike Grella thundered in an angled shot from the right to make it 4-2 in the 63rd minute, but the home side were awarded a penalty when when David Mirfin was judged to have tripped Keogh in the area.
Robinson stepped up, but Slocombe was equal to his powerful effort and palmed it away. Seconds later the Iron were on the attack and Mark Duffy's cross to the far post was headed in by Bobby Grant.
Derby responded again, with Nathan Tyson lunging in at the near post to get his brow to a centre from Paul Coutts after 83 minutes.
Three minutes of added time had gone when sub Connor Jennings forced home Scunthorpe’s fourth goal after a shot from Mark Duffy had been
beaten out and the fightback was complete in the 95th minute when sub Tom Naylor tripped Josh Walker and Grant levelled from the spot.
Extra time was goalless but Scunthorpe’s nerves held as the penalty shoot-out went into the sudden death phase when the first set of five each ended with the scores at 3-3.
It stayed level pegging until 6-6 but Derby were let shell-shocked when sub Naylor, whose foul had forced the game into extra time, completed a torrid evening by hammering his spot kick against the bar after Jennings had notched the Iron's seventh of the shootout.