In the penalty shootout United had looked close to an exit at the hands of the Cods, but were kept in the competition by goalkeeper Paul Musselwhite.
Peter Beagrie, Andy Crosby, Paul Hayes and Ian Baraclough all converted their penalties to leave the shootout score at 4-4.
Steve Torpey saw his spot-kick come crashing back off the post, but Musselwhite kept out Tony Crane's kick to keep United in the game.
Cleveland Taylor gave the Iron the lead, and the win was secured when Musselwhite kept out John McDermott's effort.