Deputy Doug at the double; Palace 3 Wolves 1.
And they may be damaged beyond repair when Palace visit Molineux for the second leg of this semi-final play-off on Wednesday.
Freedman entered the fray with just 17 minutes left and his two strikes in a goal-laden frenzy of a finale added to Neil Shipperley's headed effort.
Wolves full-back Jamie Smith helped himself to a goal, too, which gives Mark McGhee's shocked troops at least some chance to launch a counter- attack this week.
Palace fully deserved to take the advantage at Selhurst Park where their former star Geoff Thomas gave Wolves a 3-2 First Division victory earlier this season.
There was never a chance of that result being repeated. Wolves gave their own strikers Steve Bull and Iwan Roberts hardly any support and were under pressure throughout.
The fact that it was Shipperley who scored the opener in the 67th minute was a touch ironic. He has been a Palace player less than seven months and his recent run of five goals in five games has done much to improve his side's hopes of a trip to Wembley.
Wolves star Bull has been waiting to play in the top strata of English football throughout his career. He must have seen this as his big chance of taking his treasured team towards the Premiership.
But Bull was not even on the field when the game exploded with three goals in the last three minutes.
Surely he could not believe his eyes as he saw the almost total collapse of his team.
Shipperley's goal came from a towering header direct from a Simon Roger corner. The visitors had ignored warning signs from an identical situation a few moments before.
Then Shipperley, unmarked in front of goal, had keeper Mike Stowell at his mercy but miscued his header.
Stowell was again helpless when Shipperley met another cross, but his header bounced off the turf and landed on the roof of the net.
Wolves must have thought a narrow defeat would have sufficed with the advantage of the home leg to come.
Then 17 minutes from time Freedman came on for struggling youngster Bruce Dyer - and he had an astonishing impact on the game.
He swung his left boot with just a minute of normal time remaining and his shot soared beyond Stowell to finish high in the net.
Astonishingly Wolves struck back instantly with an away goal that may still be invaluable.
Fullback Jamie Smith, one of Wolves more ambitious performers with his long runs down the right flank, finally got his reward by driving low across keeper Carlo Nash into the corner of the net.
Wolves had no time to celebrate. For within seconds and deep into injury time Freedman broke clear again. His nerve held as he coaxed the ball cleverly over Stowell's head into the roof of the net.
Bull will collect a small fortune from the usual benefits of his testimonial season.
But no amount of money would match the experience of playing at last in the Premiership.
He will be desperately disappointed at not receiving more ammunition to make his own dreams come true.
He has scored 23 goals this season and was presented with his clearest chance here as early as the first minute.
He burst into the penalty box to chest down an astute ball from Darren Ferguson but his instant lob was slightly mis-hit and fell wide of a post.
Bull's only other chance came as he struck a 20-yard volley wide.
The more threatening action came at the other end.
And when the floodgates finally opened, in that devastating conclusion, Wolves were left licking wounds that may prove fatal.