The following season saw Hednesford entered directly into the first round of the FA Cup, where they defeated Hull City 2–0, before losing 1–0 to Darlington in the second round. The club reached the second round again in 1998–99, beating Barnet 1–0 in the first round before losing 3–1 at Cardiff City. A gradual decline in league performances saw them finish bottom of the table in 2000–01, resulting in relegation back to the Southern League's Premier Division. In 2003–04 the club reached the final of the FA Trophy, winning the competition with a 3–2 win over Canvey Island at Villa Park. In 2004–05 they finished fourth in the Premier Division, qualifying for the promotion play-offs; after beating Merthyr Tydfil 5–3 on penalties in the semi-finals after a 1–1 draw, they beat Chippenham Town 1–0 in the final to earn promotion to the Conference North.