Gordon Chisholm paid tribute to his Queen of the South players after they were knocked out of the Uefa Cup 4-2 on aggregate by Nordsjaelland in Denmark.
"They are all deflated and disappointed in the dressing-room, but they can hold their heads up," said the manager.
"They have certainly not embarrassed Scottish football.
"They could not have given any more and I feel that we should have progressed. We have a young team with 21-22 year olds and they will learn from this."
Nordsjaelland had gone into the second leg at Farum Park 2-1 ahead from the first leg at Airdrie's Excelsior Stadium against the Scottish First Division side.
"The damage was done in the first game, when we lost two bad goals," said Chisholm.
"We played some good stuff and were more than holding our own""Our commitment was fantastic and we could not have made a better start when Bob Harris struck his free-kick perfectly.
"We played some good stuff and were more than holding our own."
Chisholm said his side paid for having to chase for a winning goal as full-time neared.
"Our midfield had put so much into it and there were some tired legs," said Chisholm, whose side lost two goals in the last five minutes.
"In the second half, we had some half chances and maybe with a bit of luck we could have won it.
"It was a wee bit of desperation and we sent big Jim Thomson up front and they showed their quality by punishing us."
Meanwhile, Chisholm revealed that Queens are poised to make two new signings on Wednesday.
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