Holders Rangers crashed out of the Scottish Communities League Cup after a 3-2 defeat at the hands of Falkirk as hopes of a domestic treble this season were left in tatters.
Farid El Allagui grabbed a double for the Irn-Bru First Division side before Dorin Goian and Nikica Jelavic both netted for Rangers.
But Mark Millar had the final say with an injury-time winner as Falkirk booked their place in the fourth round.
Rangers started strongly as Gregg Wylde tried his luck with a shot from the edge of the area that was high and wide, before Lee McCulloch tested goalkeeper Michael McGovern with an effort from distance.
However, the best chance of the match early on fell to Falkirk 10 minutes before the break when El Allagui connected with a corner and saw his shot cannon off the body of Wylde on the line, before Rhys Bennett fired wide from the rebound.
Rangers had a decent chance to open the scoring shortly after the restart when Wylde delivered a teasing ball into the goalmouth for Lafferty but Murray Wallace was able to clear the danger before the Northern Irishman could connect.
Falkirk went ahead in the 58th minute when Kieran Duffie supplied the cross for El Allagui at the back post and he nodded past Neil Alexander from close range.
Steven Naismith was denied by the post just two minutes after coming on but Rangers found themselves caught on the break when Falkirk doubled their advantage after 73 minutes. Craig Sibbald was the provider on this occasion but the goalscorer was the same as El Allagui connected with a header in plenty of space and nodded past Alexander.
Rangers handed themselves a lifeline when Goian threw himself in front of Steven Whittaker's cross and bulleted home a header with eight minutes to go before Jelavic sent a header home from a few yards out after 86 minutes.
But just when the tie looked set for extra time, Millar's shot deep into injury time was touched onto the underside of the bar by Alexander but he could not keep the effort out of the net as Falkirk claimed a dramatic late winner.
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