Summer signings George Thomas and Sam Hughes scored the goals that put the Leicester City 'academy' side through to the last 16 of the competition at Glanford Park.
Kevin Van Veen pulled one back just before the interval but the League One promotion-chasers couldn't find another against a side including another summer arrival - £25million acquisition Kelechi Iheanacho.
Fellow first-team squad men Leonardo Ulloa, Ben Hamer, Dan Amartey, Yohan Benalouane and Aleksandar Dragovic also started in Steve Beaglehole's line-up - drawing criticism from Trophy purists, particularly those from Scunthorpe.
Academy graduate Hamza Choudhury remained as skipper alongside Hughes in midfield while another seven of City's 18-man squad had also come through the club's youth set-up.
The Foxes took the lead inside three minutes as Thomas intercepted outside the Iron’s box, first finding Ulloa before the Argentine returned it for him to slide home into the corner.
Hughes added the second after 12 minutes after Scunthorpe goalkeeper Rory Watson failed to sufficiently deal with Layton Ndukwu's stinging cross.