Under-18s boss Paul Tait rued missed opportunities after his side fell to a 3-2 extra-time defeat in Saturday's Premier League Cup quarter-final at Reading.
Goals from Tom Cannon and Sean McAllister weren't enough as Nahum Melvin-Lambert's hat-trick saw the young Blues bow out of the competition.
A fast start saw Cannon’s early effort cancelled out when Melvin-Lambert’s double gave the hosts the lead. McAllister drew the scores even after the break, before the Reading midfielder's extra-time strike sent hosts through.
"It was a very good match, end-to-end with both teams going for it," Tait told evertonfc.com.
"It was a really physical game. They were stronger than us at times, which meant that we had to dig in.
"We had eight first-year scholars starting for us today and we had a really young team, so it was tough physically. Going into extra-time really stretched the lads in terms of their fitness and their strength.
"It was a difficult but exciting game and there are a lot of lessons to be learnt from it.
"If you don't take your chances in football you can get hurt at the other end and, unfortunately, we did."
The Blues came out the traps firing and nearly went ahead in the third minute. McAllister drove forward only to be denied by a sea of Reading shirts.
Everton went ahead one minute later - Cannon instinctively latched onto the end of Dobbin's low cross to fire home.
Reading responded well, though, with Melvin-Lambert scoring twice just shy of the half-hour mark. The midfielder was able to poke home the equaliser following a deep free-kick, before completing the turnaround moments later when he bundled over the line from close range.
Despite the setback, the Blues rallied. In the final knockings of the first period, Dobbin steamed through the Royals’ defence and into the 18-yard area, only to be denied by a last-ditch challenge by Lynford Sackey.
Following their strong end to the first half, Tait’s side continued to search for a way back into the contest and soon enough, it came. McAllister powered home Dobbin's teasing cross four minutes after the restart to draw the scores level.
"We got the equaliser and then on we thought we were going to go and win it," Tait added. "But in the end, we missed the chances and we have paid for that."
Everton goalkeeper Zan-Luk Leban stayed resolute throughout a nip and tuck second half.
The Slovenian’s fingertip save kept out Augustus McGriff’s powerful strike, before getting down well to stop Alfie Anderson’s low drive.
With just 11 minutes remaining, the young Blues could have been ahead. Higgins weaved into the 18-yard area and was able to squeeze his shot through the Reading defence, but agonisingly past the post.
Dobbin had a great chance to edge the young Blues in front with just five minutes remaining. The forward capitalised on a defensive error which sent him through one-on-one, but he was unable to direct his shot past Harvey Collins in the hosts’ goal.
As the game entered into extra-time, both teams remained evenly matched. Centre-back Ryan Astley went over in the box, but penalty claims were waved away by the officials.
And despite the visitors' best efforts, it was Reading who grabbed a winner. Melvin-Lambert completed his hat-trick in the second period of extra-time to send the Royals through.