The teenager grabbed man of the match honours with a first class display at the back and he headed home two goals during the game, including the winner three minutes into extra time.
Lincoln found themselves having to defend deeply from the start with another teenager Andy Keogh, on-loan from Leeds, creating havoc with his superb foot work and deft touches.
City's tall defenders, very capable of looking after aerial matters, found themselves in trouble with Keogh's artistry plus the skills of veteran winger Peter Beagrie.
Twice in the opening minutes Keogh saw efforts blocked and then he carved out the opening goal in the sixth minute.
The youngster, who bears a striking resemblance to Alan Smith, laid the ball off for Beagrie who drove across the box and Richard Kell flung himself forward to head home his second goal of the season.
City's attack was very lacklustre and they never got the better of Butler or skipper Andrew Crosby who were commanding figures.
The Imps best efforts came from ex-West Ham player Gregory Pearson who hooked the ball over and Ben Futcher headed wide.
Scunthorpe grabbed a vital second goal in the 58th minute, Beagrie knocked in a pin-point cross to Alan Marriott's left-hand post and Butler stole in to head home.
When City struck back Pearson was denied by Paul Musselwhite, but they eventually made ground with a 74th minute penalty. Lee Ridley was penalised for a foul on Simon Yeo and Gary Taylor-Fletcher netted the spot-kick at the second attempt after it had to be re-taken.
City found reserves of strength to stage a fightback and they equalised in the 90th minute, the tall and gangly Futcher heading home Peter Gain's right wing corner.
The game then looked to be heading for a draw but in the third minute of added time the strike force of Beagrie and Butler came up trumps for Scunthorpe.