Holloway rested every player that started the 2-1 loss at Stoke last weekend for the second-round trip to Bristol City, which also ended in defeat.
But, with the same starting XI that played at Stoke recalled for the visit of Sunderland, goals from Danny Gabbidon, Dwight Gayle and Stuart O'Keefe secured their first Barclays Premier League points of the season at the expense of the 10-man Black Cats.
Gayle tucked away the resulting penalty to put the Eagles on their way to a memorable victory, with Holloway delighted with decision to make the midweek changes.
"This time last year we played Bristol City away [in the Championship] with a full team and lost 4-1 at more or less this time," he said.
"In the week I made a big decision that I was not going to take the ones who were involved on Saturday and I thought you saw the freshness.
"I spoke to the chairman about it and wasn't scared of any sort of bad result, we got one but we had no balance in that team."
There had been suggestions in previous weeks that Holloway was fighting to save his job but, after guiding Palace back to the top-flight through the play-offs he believes his position is not in question.
"I can assure you (chairman) Steve (Parish) and I know what we are trying to do and are pulling in the right direction," he said.
"I can't help what people think or what people say, I'm just going to do a good a job as I can and 80-odd days ago I think I did a pretty good job to be honest."
Mali winger Jimmy Kebe became the club's 11th summer signing when he joined from Reading on Saturday but Holloway, who is likely to add Huddersfield full-back Jack Hunt to his squad, is still looking for even more new recruits.
"We're going to smash some things and the chairman and the other directors really want to have a go," he added.
"Just because we haven't done it yet, it just takes time to get people you want, but I'm sure any player watching that [win over Sunderland] might not quite think we are also-rans.
"Jimmy Kebe is an experienced wide-man and at the moment I've lost not only Wilf [Wilfried Zaha] but Jerome Thomas, who has not been fit yet, and [Yannick] Bolasie.
"So he is going to give competition in the wide areas and it takes a really big squad in this division to have a chance so hopefully we can add four or maybe five by Monday."