The Coatbridge side wasted the perfect opportunity to open the scoring after just four minutes when striker Marc McCusker was upended 12 yards from goal by Spiders goalkeeper Mark McGeown. Paul McLeod took the penalty, but McGeown redeemed himself by diving low to his left to save.
The home side took control after that escape and midfielder Martin McBride missed three good chances to break the deadlock before half-time with the visitors having another good claim for a another penalty when Jamie Brough looked to have fouled McCusker.
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Hide AdThe second half was a tense affair until Douglas arrived right on time to meet a McBride corner on with three minutes to go to volley home the winner.
Forfar, already assured of their play-off spot, moved four points clear in second place when they defeated Stranraer 2-0 at Station Park. On-loan Dundee striker Bryan Deasley headed home a Graham Gibson cross from close range after 26 minutes. Deasley then added another from the edge of the box midway through the second period to seal the victory.