Lions FC – who progressed to the Round of 16 in the 2015 edition – fell to a shock 3-1 loss to the Capital 1 League outfit, a tier below the Premier League.
Knights raced out to a 3-0 lead after 65 minutes with Andrew Walsey, Jay Reid and Ashley Shore all finding the target for the hosts.
OTHER CUP RESULTS
In another upset, Premier League outfit Eastern Suburbs FC were bundled out 4-3 by second tier club Wolves FC in a thriller at Carmichael Park.
Mitchel FC, Taringa Rovers FC, The Gap and Centenary Stormers all enjoyed big wins on Tuesday night, while Capalaba FC squeezed past North Star FC.