The Lilywhites lost on penalties on a mudbath of a pitch at Victoria Park, PNE boss David Moyes describing the playing surface as ‘scandalous’.
“Moor Park would have been better, but I suppose it was the same for both teams,” said Moyes.
The game had finished 2-2 after 90 minutes, all the goals coming in the last 17 minutes.
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Neither side could find the net in extra-time, thus it went down to penalties.
North End scored their first three from the spot, but Jason Harris and teenager Stuart King both saw their efforts saved and it was the home team who went through.
This was the second go at playing this tie, it having been postponed the week before due to a waterlogged pitch.
It had been a late call-off, the North End team having already arrived in Teesside.
Moyes men were in the Second Division at the time and pushing for promotion, hosts Hartlepool third from bottom of the Third Division.
Until the late goal rush, there was precious little quality on show.
The big talking point was a red card for Hartlepool midfielder Gustavo Di Lella.
Having already been booked, the Argentinian slid in two-footed on midfielder Michael Appleton and was given his marching orders.
A Gary Parkinson shot clipped the bar, then the PNE right-back cleared an effort from Craig Midgely off the line at the other end.
Hartlepool took the lead in the 73rd minute, Tommy Miller playing a one-two with Midgely before firing a low shot past David Lucas from the edge of the box.
North End were level four minutes later, substitute Kurt Nogan sending over a cross from the left which found Jon Macken.
The front man’s header hit the bar and Julian Darby was first to the rebound to knock the ball into the net from close range.
When Preston scored their second goal in the 85th minute, it looked like victory was theirs.
Nogan was tripped in the box by Peter Beardsley and Parkinson stepped up to blast the penalty into the roof of the net.
But they were pegged back a minute into added-on time, Miller netting after a shot from Ian Clark had been parried by Lucas.
Golden goal extra-time did not produce another goal and it went to penalties.
The shoot-out got to 3-3 with Macken, Nogan and Parkinson scoring.
Harris’ penalty was saved and then Beardsley lifted Pools’ next spot-kick over the bar.
King, 17, on as a sub for his debut, saw his penalty saved and it was left to Miller to score and send the home side through.
PNE: Lucas, Parkinson, Jackson, Murdock, Harrison, McKenna (Nogan 60), Darby, Gregan, Appleton (King 81), Harris, Macken. Sub (not used): Morgan.