The first round was competed with 46 teams: 15 Bezirkspokal winners (indicated by an asterisk), 29 teams from the DDR-Liga and the two teams relegated from the DDR-Oberliga in the previous season. BSG Chemie Premnitz, a DDR-Liga side, were given a bye to the intermediate round. The competition was played in a knock-out format; if scores were level after 90 minutes, the match went into extra time. If the scores were still level after this, a replay was played.
After an intermediate round, the participants of which were determined by a draw - three Bezirkspokal winners and nine DDR-Liga sides - the 14 current Oberliga teams joined the competition. Three Oberliga sides were already eliminated at this stage: F.C. Hansa Rostock, FC Rot-Weiß Erfurt and BSG Stahl Riesa. 1967 Oberliga champions FC Carl Zeiss Jena needed a replay against Motor Grimma that they won convincingly; 10-1 was the final score. The only other remaining Bezirkspokal winner, Berliner FC Dynamo II was eliminated after a 1–2 loss to DDR-Liga side SG Dynamo Dresden.
The third round saw the repeat of last year's final between 1. FC Union Berlin and Jena. Jena had their revenge, winning 0–1 in berlin and eliminating the title holders. Two DDR-Liga sides, Wismut Gera and Dynamo Dresden had qualified for the quarter-finals, but lost their away games and went out. Last year's finalist Jena was eliminated in the quarter-finals as well, losing 1–4 to Vorwärts Berlin who in turn went out after a 1–2 loss against FC Karl-Marx-Stadt. Karl-Marx-Stadt's opposition was 1. FC Magdeburg who had reached their third final by beating Berliner FC Dynamo in their home ground.
Only Magdeburg's fans were on the losing side of the duel between the third-placed and the seventh-placed Oberliga teams. A mere 200 FCM fans had found the way to Dresden and were vastly outnumbered by 7,000 Karl-Marx-Stadt supporters. On the pitch, however, things were completely different. A clearly superior 1. FC Magdeburg side won the final by the biggest margin since 1950 when EHW Thale had won the cup with a 4–0 scoreline as well.
The meeting began in a hectic fashion, only 15 minutes into the match both FCK's Göcke and FCM's Zapf had had to be treated for injuries, but both could continue. At first, karl-Marx-Stadt, full of enthusiasm, created a number of opportunities. Göcke went close in the 12th, and in the 27th Zapf had to scratch the ball off the goalline. Magdeburg sat back, relying on their safe defense, and waited for opportunities to counter-attack. These came up just a minute after Zapf's save: Stöcker started a run down the left, going past Göcke and outplayed Peter Müller. His cross reached Ohm who scored with a header. From this moment Magdeburg were in control of the match, sending their forwards to attack the very moment they won the ball. Ohm, Seguin and Abraham dominated in midfield and Karl-Marx-Stadt's play was reduced to individual efforts, their forwards reduced to ineffectiveness.
Magdeburg consequently seized their dominance in the second half of the match. Six minutes after kick-off it was again Stöcker who was the starting point of the next goal. his corner kick was headed in by Walter to make it 2–0. Karl-Marx-Stadt attempted to turn the game and threw everything forward, thus offering their opposition even more room. Magdeburg took up the offer, Ohm starting a solo at the half-way line, finishing off with a gentle lob over Gröper for the third goal. Eight minutes later it was Sparwasser who scored the fourth goal after outplaying two opponents. Magdeburg played as if in a frenzy and had several more clear scoring chances, the last in the 85th when Sparwasser forced subbed-in Kaschel to make a great save.
Magdeburg had won their third cup title with an excellent performance. Dresden's footballing hero of times past, Richard Hofmann, complimented the team:
"Thanks a lot boys for this footballing joy. This was real advertising for our beautiful sport. You won outright and deservedly. Your defense was positioned dead right, played cleverly. Your attackers were more and more dominant with the ongoing game. You won the cup in a superior manner. It was a great game, it was a joy to watch you play." [1]
