McDermott, who went on to play for Arsenal, was part of a Slough Schools side who went all the way to the final in 1976, eventually losing 4-2 at Anfield in the first leg and winning at home 1-0.
That was a David and Goliath clash for McDermott, much like Reading's victory against Liverpool yesterday, when they equalised from the penalty spot in the last minute before going on to win 2-1 in extra-time.
He said: "Blimey, does anyone still remember me scoring here as a kid? I can only recall scoring with my head, it was a great experience. And we nearly pulled it back in the second match.
"I remember it still but to go back there as a club manager and win a big cup tie is more than I could ever have expected.
"We deserved to win, we created more chances than Liverpool and the whole occasion was fantastic.
"I am still proud of our players and everyone involved at Reading. It was a night when people can say, 'I was there' and our whole season can be changed by this."
He added: "Beforehand we talked to the lads about Anfield, the history of the place and we kept reminding them that they could play a game there and do okay but still be overpowered in the end.
"The night before the game I didn't get much sleep, I was wide awake thinking not only about stopping Liverpool but how to convince the lads that they could go out and play good football in their own right.
"To be confident, to cope with the situation and not collapse. If you are not brave enough in possession, you will get beaten.
"We were brave, we passed the ball well and created chances. No one can say we sat back and soaked up pressure. We took the game to them.
"Liverpool are a great club so for us to win at Anfield was just fantastic. It will galvanise us, kick us on this season.
"There's not much more I can do to get the job full-time after that."
McDermott believes Reading's Anfield success can only galvanise them for the rest of the season as they fight to stay in the Championship, only two years after being relegated from the top flight.
He said: "We have been through a lot in recent months. But now I believe our whole season can be galvanised.
"I'm chuffed for everyone at the club, the people who have worked so hard over recent times.
"A lot of teams go to Anfield and freeze, they do not respond to the history of the place. It can overawe people.
"But I just could not fault any of my players. The point was that, even when it went into extra-time, I felt we could win it.
"We were not hanging on, we created a lot from our possession. I was saying to people, 'we can win this, let's go for it'.
"I don't know whether Liverpool had an off night or not. I wasn't watching them, I was watching what our guys were doing, and they were doing pretty well against really top players."
On his own chance of dropping the caretaker tag, he said: "Since I have had this job, the staff have been fabulous. They do so much for you and all I have to do is the team talks. I'm lucky.
"The chairman (John Madejski) has told me to do the job, look after the team, and I will do that and wait. I want the job, let's see what happens.
"Everyone was jumping off the walls in the dressing room. But we must get our heads right now, we go to Nottingham Forest on Saturday and they are flying.
"Forest are a very good side, we must recover from the physical side of things in time for the next match. That will be tough but we must try to carry this into our next game."