Championship leaders Dundee United crashed out of the Tunnock's Caramel Wafer Cup after a penalty shoot out defeat to Arbroath.
The sides couldn't be separated over 90 minutes at Tannadice but Cammy Smith and Sam Stanton's costly misses in the shoot out sent Dick Campbell's men through to the fourth round.
Elsewhere, Inverness Caley Thistle cruised past Morton for the second week in a row to ease into Tuesday's draw.
The Highlanders, who fired five past the Greenock side on league duty just eight days ago, again turned on the style with a 3-1 victory.
Goals from Nikolay Todorov, Aaron Doran and Miles Storey swept the Ton aside to book a spot in the last 16, with John Sutton netting a consolation for the visitors.
They were joined by Partick Thistle as strikes from Joe Cardle and Kenny Miller proved enough to see off Montrose at Links Park.
Kelty Hearts held English Conference outfit Solihul Moors over 90 minutes before losing out on spot-kicks.
At Broadwood, Clyde recovered from two goals down to earn a memorable 3-2 triumph over Queen of the South.
Full third round results
Waterford 3 Hearts Colts 1 (Friday)
Airdrie 3 Bohemians 2
Dundee United 0 Arbroath 0 (Arbroath win 4-3 on penalties)
Dunfermline 1 Alloa 2
Formartine United 0 Glenavon 3
Inverness 3 Morton 1
Kelty Hearts 1 Solihull Moors 1 (Solihull Moors win 4-2 on penalties)
Montrose 0 Partick Thistle 2
Raith Rovers 2 Falkirk 0
St Mirren Colts 1 Stirling Albion 0
Wrexham 1 Ayr United 1 (Wrexham win 5-4 on penalties)
Connah's Quay Nomads vs Berwick Rangers (5.15pm kick off)
Dundee vs Elgin City (Sunday)
Ballymena United vs Rangers Colts (Wednesday, September 18)
