United were back in the Third Division but the board warned that a break-even gate of 9,200 was required and that players would be sold if gates didn't reach 7,500.
Manager Jim Smith returned to his old club Boston and signed Bobby Svarc's old strike partner John Froggatt. The pair rekindled their partnership with Svarc netting 24 in the League with 16 coming from Froggatt. Crowds fell way short of the board's ambitions with an average of 4,941 clicking the Layer Road turnstiles as United finished in a steady eleventh position.
Having reached the Quarter Finals of the FA Cup only four seasons previously, United emulated that achievement in the League Cup. Beating Oxford and Southend, the U's hosted First DivisionCarlisle beating the Cumbrians 2-0 to earn a home tie with Southampton. A 0-0 draw at Layer Road led to an amazing 1-0 replay win at The Dell, courtesy of a Barry Dominey goal, setting up a Quarter Final tie with Aston Villa. The Midlanders proved just a shade too strong for United winning 2-1 before an expectant 11,812 crowd. Whilst United's focus had been on the League Cup they were knocked out of the FA Cup by non-League minnows Leatherhead.
Out of the cups, fifth placed U's could concentrate on achieving Second Division football. Just one win in seven from New Year's Day onwards saw U's fall to mid-table and they never recovered.