LUGGY'S League Cup hoodoo continued as Argyle crashed out at the first hurdle for the second season running on a disappointing evening in Gillingham.
Despite a positive start, two goals in four minutes just before half-time, from Simeon Jackson and Andy Barcham, took the wind from the New World sails.
A fantastic Luke Summerfield free-kick reduced arrears five minutes after the interval and the Greens piled forward, but the home side held on to add another chapter to Paul Sturrock's miserable Cup story.
Luggy made just two enforced changes from the side that drew 1-1 with Crystal Palace on Saturday.
Injury to Carl Fletcher meant that there was space for Alan Judge in the midfield, whilst a knock to Krisztián Timár shunted Gary Sawyer into centre-back, Jim Paterson to left-back, and Karl Duguid was recalled to the midfield.
On the bench were Joe Mason and Damien McCrory, two of Argyle's most promising young talents hoping for a debut in Kent.
Gillingham, who thrashed Argyle's pre-season opponents Swindon 5-0 on Saturday, made three changes with Simon Royce, Chris Palmer and Kevin Maher stepping in for Alan Julian, Mark Bentley and Jack Payne respectively.
Despite Gillingham's high hopes, it was Argyle who got the first chance when a smart Steve MacLean ball found Judge, who skipped his way into the area only to take an air shot ...ball out of play.
MacLean was again at the fore-front just five minutes later when another exquisite ball found Summerfield, who broke into the area and fired a low ball across the six-yard box. Mackie looked favourite to get there but was denied by the last-ditch challenge of John Nutter, who took one for the team.
Jackson went close for the home side when his little dink over Marcel Seip saw him through on goal but his shot was weak and trickled past the post.
Argyle came close again on the 20 minute mark when Jamie Mackie, in acres of space, chose to shoot on sight rather than advance on goal, and Royce made a comfortable save.
Despite Argyle's pressure, Gillingham still proved dangerous on the break and Jackson, on a high after his weekend hat-trick, burst clear, but, on this occasion, even with team-mates for company, he flashed a wild shot over.
Argyle were back on the attack again soon after, though when Mcnamme burst into the box with pace and got off a decent cross, the ball fell to Rory Fallon, who scooped his volley high into the stands.
Club-captain Romain Larrieu was then called into action when MacLean's pass sold Summerfield short just outside the area. Barcham broke for the Gills but Le Keeper was on hand to make a tremendous save at the feet of the pacy striker.
Back at the other end, Argyle went close again, MacLean gathering up the loose ball to unleash a sensational 35-yard drive towards the top corner. Royce shifted his feet quickly to make a great save.
Then, out of nowhere, came Gillingham's best chance of the game. When what looked like a routine clearance came for McNamme he sliced it and sent the ball towards his own goal.
Larrieu reacted instinctively to produce a stunning save low to his right. The sigh of relief from both McNamee and Larrieu could probably have been heard as far down as Bodmin.
The relief lasted barely a minute.
It was one-touch football all the way for the confident Kent-outfit and when Barcham drew Larrieu, he squared to Jackson, who slotted the ball into an empty net.
It was a cruel blow to Argyle who had dominated the first-half, but just four minutes later, it got worse.
With the crowd behind them, the Gills broke again and were rewarded with a corner. The corner, nicely whipped in by Palmer, found Barcham unmarked to head the home side 2-0 up.
To go in 1-0 down was unlucky, but to go in two down was unjust, as Argyle left the field to choruses of 'Are you Swindon in disguise?'
Straight after the break, the Pilgrims were back in it. MacLean broke forward towards the box and was brought down by Richards just half-a-yard outside the area.
After much consultation, Summerfield stepped up and fired a wonderful free-kick low, underneath the jumping wall, and square into the bottom corner.
Argyle, with the wind in their sails, began to ask more and more questions of Gillingham as Mackie, Duguid and Judge all created half-chances for themselves.
Gillingham managed to weather the storm until the introduction of Craig Noone, who, with his first touch, got a shot off that curled just wide of the post.
As the last ten minutes approached, Luggy introduced Barnes, whose first touch fell perfectly into Duguid's run, only for him to fire straight into the body of Royce.
Argyle's best chance to equalise fell to Mackie in injury-time. Fallon slipped a lovely ball into his path and the Exeter man seemed to compose himself before steering a shot past Royce, but, agonisingly, it rolled the wrong side of the post.
Luggy will take heart from his side's second-half resurgence but the Greens were rightly punished for four minutes of defensive frailty.
Gillingham (4-4-2): 1 Simon Royce; 2 Barry Fuller, 6 Garry Richards, 16 Josh Gowling, 3 John Nutter; 9 Chris Palmer (22 Tom Wynter 79), 14 Adam Miller, 7 Kevin Maher (30 Mark McCammon 73), 26 Curtis Weston; 11 Andy Barcham, 10 Simeon Jackson. Substitutes (not used): 19 Jacob Erskine, 23 Alan Julian (gk), 24 Rashid Yussuff, 27 Luke Rooney, 28 Jack Payne.
Booked: Richards 59.
Argyle (4-4-2): 1 Romain Larrieu; 16 David McNamee, 19 Marcel Seip, 18 Gary Sawyer, 3 Jim Paterson; 25 Alan Judge (6 Chris Clark 73), 2 Karl Duguid, 20 Luke Summerfield (24 Ashley Barnes 80), 8 Jamie Mackie; 9 Steve MacLean (17 Craig Noone 73), 14 Rory Fallon. Substitutes (not used): 11 Kári Árnáson, 23 Kyle Letheren (gk), 29 Damien McCrory, 32 Joe Mason.
Booked: Mackie 62, Sawyer 67, Seip 72, Fallon 90.
Referee: Jarnail Singh (Middlesex).
Attendance: 3,306 (121 away).