Dele Alli scored the winning spot-kick at the ground of his boyhood club as Spurs beat Watford on penalties after a 2-2 draw at Stadium MK.
The midfielder received a glowing reception at the home of MK Dons - which Spurs used as a temporary venue for this Carabao Cup third-round clash - having come through the club's youth system.
Isaac Success lit up a quiet game with an opener 30 seconds after half-time, but Alli netted his first of the night - also from the spot - with nine minutes to go after Christian Kabasele was sent off for a foul on the midfielder.
Within minutes of levelling, Spurs went in front, as Erik Lamela finished off a sweeping counter-attack (85), but a manic final 10 minutes was not over as Etienne Capoue's shot was diverted beyond Pablo Gazzaniga by Ben Davies (89).
Tottenham: Gazzaniga (7), Aurier (7), Alderweireld (8), Sanchez (5), Davies (5), Winks (6), Wanyama (6), Sissoko (7), Alli (7), Lamela (7), Lucas (6).
Subs: Son (7), Dembele (7), Llorente (5).
Watford: Gomes (6), Navarro (5), Cathcart (6), Mariappa (6), Masina (5), Femenia (7), Wilmot (7), Chalobah (7), Quina (6), Sema (6), Success (7).
Subs: Hughes (7), Capoue (7), Kabasele (3).
Man of the match: Toby Alderweireld
After Capoue and Domingos Quina missed spot-kicks in the shoot-out, Alli stepped up to send Spurs through to the fourth round.
A forgettable first half was dominated by Spurs, but they failed to register a shot on target while Watford never threatened Gazzaniga's goal.
That all changed from the restart when Success shrugged off Serge Aurier and ran onto Kiko Femenia's pass to put the visitors ahead straight from kick-off.
They should have doubled their advantage when Ken Sema ran onto a deflected Watford cross four yards out, but his air shot let Spurs off the hook.
With nine minutes to go, Tottenham levelled, after Kabasele - who had only come on five minutes earlier - clipped Alli's heels in the box and was harshly sent off.
Craig Cathcart was the only Watford player to keep his place from the draw with Fulham on Saturday.
Tottenham made eight changes, keeping Pablo Gazzaniga, Lucas Moura and Toby Alderweireld in from the weekend.
Alli fired into the corner beyond Heurelo Gomes' dive and within four minutes Tottenham turned the game on its head when they countered from the edge of their own box, and Dembele's through-ball was tucked inside the near post by Lamela.
Both sides were down to 10 men when Aurier was forced off with injury before Capoue took aim from 20 yards as the clock ticked into its final 90 seconds. His drive deflected off Davies' leg and inside the near post to beat Gazzaniga.
However, in the shoot-out, the goalkeeper was not to be beaten by Capoue or Quina's poor penalties while Spurs scored all of theirs as Alli sent them through to round four at the club where his professional career began.
Man of the match - Toby Alderweireld
Spurs deserved more from Alderweireld's wonderful passing, picking out Aurier on the right on numerous occasions before Watford finally sniffed it out.
Bar one rash run for the Watford opener, he was also solid at the back, keeping Success quiet and impressing throughout.