The Hatters suffered their first defeat of the season at the hands of the five-time Carabao Cup winners after goals from Juan Mata, Marcus Rashford and Mason Greenwood.
Speaking after the final whistle, Jones said: “I’m so proud of the group. For 86 minutes I thought we were outstanding. It took a penalty, whether it’s dubious or clumsy, it took a penalty to take the lead.
“We had superb structure, probably needed a bit more quality in the final third, but as you say, that comes with £150 million. At the minute we haven’t got that, but I'm really proud of the performance, the work-rate.
"The changes that we made showed that our structure is in a great place. I'm just sick they scored the two late goals because if I’m honest, it put a gloss on it.
“We have to make sure we are professional in terms of that, it’s a learning curve for us. Turn the ball over in the middle of the park and they’re into you like a knife and butter.
"I’ll know when I look at it, how we played and how we went about it, we’ve got a squad here very capable of doing something really good in the Championship.
“We’ve got to use the squad. We can’t go and play an absolute, flat-out 90 minutes with the same team, then do it again against Watford.”