The Dons youngsters kept up their good run of form with a deserved win over the Hornets.
Watford, managed by former Dons academy coach Gary Smith, topped the FA Premier Academy league table going into the game, but were outplayed by Mike Dove's side for long periods.
Both sides started brightly, but it was the visitors that had the better chances in the first half. Ross Morley's driven cross failed to find a Dons player as it flew across the face of goal on 10 minutes, and Jamie England fired wide on 13 minutes.
The deadlock was broken on 25 minutes when Sam Baldock ran at the defence and laid the ball into the path of Dean Lovegrove, whose shot was deflected past the keeper by a Watford defender.
Watford made a whole host of tactical changes to try and gain the upper hand after the break, but it was the Dons who continued to boss the match in the opening stages of the second half.
The visitors had the ball in the net on 61 minutes as Ross Morley's free-kick was nodded back by Sam Page for an easy close range finish, but the goal was ruled out for offside.
Watford then had a good 10 minute spell without managing to grab the equaliser, and the Dons hit back with a chance of their own on 69 minutes, Lovegrove playing in Baldock, whose effort was well saved.
The lead was doubled two minutes later though, Joe Howe overlapping down the left and winning a corner which Adam Moriarty sent over, England, pictured above right, finishing off at the far post with a header.
Watford upped the tempo in the closing stages as some added bite crept into the game, but the Dons held on to register their third win of the season.
Team: Webb, Howe, Murphy, Page (capt), Collins, Battams, Lovegrove (Day), Moriarty, Morley, England, Baldock. Not used: Flood, Kent, McComick.