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The game will be played the week beginning Monday 20th September.
The exact date and time of the second round match against Watford and the price of tickets will be announced within the next couple of weeks.
Ray Lewington's side booked their place in round two with a 1-0 win over Cambridge United. Andy Ferrell's eighty-second minute goal was enough to give the Hornets the win.
Steve Coppell's side enjoyed a more comfortable win, goals from Shaun Goater and Andy Hughes gave the Royals a classy 2-0 win over Oxford to line up our second round tie.
Last season, the Royals defeated Vicarage Road-based Watford 2-1 at the Madejski Stadium in the league thanks to a late strike from Steve Sidwell.
However, the North London side beat the Royals 1-0 in the last game of last season, denying Reading the chance of a place in the play-offs.
Elsewhere in the draw Phil Parkinson's Colchester have been drawn at home to West Brom who were recently promoted to the Premiership.
Santini's Tottenham will travel to Oldham, Blackburn play Bournemouth, Leeds will be in action at home to Swindon, Yeovil are up against Bolton whilst Aston Villa play QPR.