The Owls might have taken an early lead when Adam Proudlock lifted the ball into the middle and Holt's header beat Scunthorpe's Tom Evans but rebounded off the bar.
Wednesday then came under pressure with Leigh Bromby pleased to head away from Steve Torpey before the Iron striker stabbed another effort wide.
Scunthorpe's positive attitude paid dividends in the 33rd minute. Skipper Mark Jackson lofted the ball into the penalty area and Graeme Lee made an error in judgement, heading back and Torpey quickly dispatched the ball home.
Kevin Pressman was kept very busy punching away a ball from his own defence and then clearing from Peter Beagrie.
Scunthorpe almost increased their lead in the 51st minute Richard Kell knocked the ball in and Torpey's header forced Pressman to save at the second attempt. Wednesday struggled to create any real threat, although Evans did save from Holt, while Lloyd Owusu fired straight at the keeper.
Scunthorpe remained strong adding a second goal in the 71st minute. Beagrie, who had been a constant thorn in the Wednesday defence, crossed from the left and Matthew Sparrow's header hit the upright before Torpey turned the rebound home.
Wednesday pulled a goal back in the 84th minute when Holt poked home from close range and the youngster snatched a replay with his second goal in stoppage time