The Pars, playing in their first ever final, found the table-topping Highlanders too hot to handle as they slumped to a 6-0 defeat at Recreation Park in Alloa.
Inverness, relegated from the Premier League last season, found themselves in front inside the first few minutes after the Pars conceded an own goal and it was largely one-way traffic for most of the afternoon, as City raced into a four-goal lead by half-time.
Despite the defeat, goalkeeping coach Penny Aitken remained upbeat and said that they had done themselves proud by reaching the final having just won promotion from the Second Division last season.
She told Press Sport, "We weren't expecting miracles as we've just won promotion and Inverness have won every league game this season.
"They're a top side and they proved that by playing some beautiful football.
"I think we were caught out by the occasion a little bit as there was a lot of hype about it but I have to give credit to Inverness.
"It was a blow to lose the own goal in the first couple of minutes but in the second half we passed the ball about and caused some problems.
"The girls know that they have a better performance in them, so that was disappointing.
"But they've done so well to be there and for some it is their first experience of playing in a final.
"There are teams out there who won't get to a cup final so it's onwards and upwards for us."
The Pars Ladies currently sit eighth in the league with eight points from six games and play East Fife Ladies on Sunday at King George V Park in Leven. Kick off is at 2pm.