Dougie Keast's side looked to be heading out of the competition with the visitors 2-0 up thanks to a Forbes strike on 19 minutes and an own goal from Watson five minutes later.
But Watson made ammends five minutes before the break as ge pulled one back and Tyrone Kirk restored parity just two minutes before the interval.
Lincoln went ahead again through Lowman after 59 minutes but their lead lasted less than a minute with Jamie Clarke levelling.
Again Stamford's back line crumbled as the visitors scored their fourth through Wallacxe after 66 minutes, but Dan Cotton levelled with 12 minutes remaining and the clash went into extra time.
Lincoln tired and for the first time in the match the Daniels went ahead through Jamie Clarke in the 96th minute. And Phil Stebbing secured what had looked an unlikely victory from the penalty spot three minutes from the end.
The Daniels are back in league action tomorrow night (Tuesday) when they travel to Spalding United for a local derby.
* Deeping Rangers remain top of the Eagle Bitter UCL Premier Division after drawing 1-1 with Long Buckby at Outgang Road on Saturday.
After a goalless opening half, Buckby broke the deadlock through Russ Dunkley seven minutes after the restart.
But September goalscorer of the month Ryan Semple netted his ninth goal of the season after 66 minutes to restore parity and ensure Rangers remain four points clear of their opponents.
* Bourne are without a win in 11 league games and remain rooted to the bottom of the table after losing to Newport Pagnell at the Abey Lawn.
The only goal of the game arrived after an hour from Danny Nicholls.
* Blackstones slipped into the bottom two with a disappointing 2-0 defeat at fellow strugglers Rothwell Corinthians.
Two first half goals gave Corinths their second top flight victory and lifted them out of the bottom two.
Andy White gave the home side a great start with a sixth minute opener, and two minutes before the break Neil Woolmer scored the second.