He is adamant that bragging rights at this stage of their fledgling careers will mean little if they don't continue to progress towards the first-team squad.
Dalglish told Liverpoolfc.tv: "It's a fantastic day for the kids to be playing at Anfield once again, particularly against Manchester United, whose youth system has been fantastically successful for them over the years.
"Their principle has been the same as ours: it doesn't matter if you don't win the FA Youth Cup, it's about getting players through.
"I remember years ago they lost to Leeds United in the Youth Cup final. Leeds got one player through who lasted a couple of years; United got Beckham, Giggs, the Nevilles, Scholes. We'd sacrifice the Youth Cup to get that number and quality of players.
"That's not to say we want them to lose!
"It's great that we're in it and it's special for the lads because it's the Cup. It's not just the first team who have competition with Manchester United - it's all levels. And they are just the same as us: they'll look forward to games against Liverpool."