I n between a morning training session and boarding a flight to Manchester, Dougie Freedman takes a moment to reflect on being suddenly exposed to the stresses and tensions of management.

"At the time, it didn't seem so clever," he says of taking charge of Crystal Palace in January when the team was second bottom of the npower Championship. "But looking back, it was a great idea."

As he did when he was a Palace striker, Freedman saved the club from relegation. It took a single goal, against Stockport in the final three minutes of the 1999/2000 season, for Freedman to become a heroic figure for the Palace fans, and they still revere him. His work last season was more gruelling – Palace had the worst goals against record in the Football League when he was appointed on January 1 – but something about Freedman's bloody-mindedness, and the combination of enterprise and commitment that defined his playing career, was encouraged by the severity of his circumstances.

"It was a challenge I wanted to take on," he says. "And I'm a better manager for it, as well as a more relaxed one." At the end of last season, Palace finished safely in 20th place, but Freedman was still frustrated that his team did not manage to climb higher in the table, a sentiment that reflects the exacting standards and ambition he has brought to management. The contrast between the beleaguered nature of the team under George Burley and the surge in confidence and assurance that Freedman roused was significant.

Now, having carried that form into this campaign, Freedman is preparing his side for tonight's Carling Cup quarter-final against Manchester United at Old Trafford and aiming to maintain their place in mid-table security. His competitive instincts, which still carry the sharpened edges honed by his upbringing in Milton, Glasgow, would not be comfortable with accepting such a modest outcome in the league, but Freedman understands the circumstances of his club.

During his two spells as a player at Selhurst Park, he twice experienced administration. It took the intervention of four independently wealthy businessmen during the summer to secure the club's financial future, and Freedman has been charged with developing the football infrastructure and building on the impressive work of the youth academy. Of the five graduates Freedman has granted first-team debuts to, Wilfried Zaha and Jonathan Williams are considered the most promising, but the ethos of Palace now is to rear their own young talent and for the supporters to enjoy watching them.

Chasing promotion has not been discarded as an aim, but it has been overtaken by other priorities. Freedman was once so immersed in the club's plight that he simultaneously talked the previous board out of selling Darren Ambrose while on another phone granted the groundsman permission to plant grass seed. The demands on him are less urgent or involved now, but he wants to be more than a training ground presence and is immersing himself in every aspect of the club.

"We're starting anew," he says. "We are a fresh, young team that is only beginning a long journey and I don't look at league tables, at all. I'm under no pressure to get promotion or do anything for the next two or three years except stabilise the club and move it forward. We were in a relegation battle last year and when I took over it was difficult times. I knew what I had in the dressing room and I had self-belief that we could stay up. My job is to make sure that we're still in this league and working towards producing good players who can one day, hopefully, get us to the Premier League. It's a good position to be in because many managers are under pressure to get results. My position is a little bit different, we produce players and we look forward to watching them."

The prospect of facing United at Old Trafford, even if the starting line-up is likely to include youth and fringe players, might be daunting to lower league sides. Freedman would never allow intimidation to settle on his team, though, and they have already knocked Southampton and Wigan Athletic out of the competition.

There are several experienced players in his side, including Julian Speroni, the former Dundee goalkeeper, but the Palace manager sees this encounter as an opportunity for his young tyros to be exposed to the demands of the top-flight. At only 37 himself, he will also gain experience from the trip, but there is a quality of boldness, of being unflinching, that is central to Freedman's nature.

"We've earned the right to be in the quarter-finals and to play Manchester United," he said. "We've got a very young and promising team, so no matter what way the result goes, we will come out of this better players, better coaches and a better manager. It's a win-win situation. I'm realistic in how we need to approach it, but on any given night if you prepare properly, then you never know. I believe that this is a game for the fans, who have been in relegation zones and in administration for the last two or three years, but have always stuck by us. This is the night to say, 'go and mix with the Man United fans and watch your team in this big arena, because you deserve it'."

By his mid-20s, Freedman knew that he wanted to eventually turn to management, and began taking notes about training sessions, tactics and the other strands of the game. By the end of his playing career he had earned his coaching badges and there is a sense now of him growing at the same time as this new version of Palace, one that is financially sound, confident and patient.

"I understand my job, and that in January if I'm doing my job well then one or two players will command interest from other clubs," he added. "That's not a problem to me. In a few years' time, when we're strong financially, we might not have to sell players, and so make a charge for the top league. That's what I'm looking forward to."

At Old Trafford tonight, Freedman will not be daunted or subdued, only eager to absorb every moment and take in the surroundings; to understand again where he eventually wants to take his club.