The Christy Ring Cup winners led 1-11 to 0-7 at half-time, Danny Toner with the goal after 19 minutes, but they failed to score for 26 minutes after the break.
Derry took over and scored 11 points in-a-row, Kevin Hinphey hitting four from play, but rued eight second-half wides as Down rallied to force a replay.
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