The 20-year-old Serb thwarted a fight back from Swiss powerhouse Federer, who was aiming to lift the 50th trophy of his career.

But Djokovic, who had beaten Federer's hot Spanish rival Rafael Nadal less than 24 hours earlier in the semifinals, calmly ripped through a final set tiebreaker to win a second Masters shield this season after Miami five months ago.

"I can't describe the feeling I have right now," Djokovic said. "It's like a dream come true, especially against Federer in the finals, to win those tiebreakers was just incredible.

"I managed to win these tie breaks against a player who probably has the best score in tiebreakers, who is the strongest player mentally in the world right now."

Federer has now lost six times this season, one more than in all of 2006. He stands level on four season titles with Djokivic, that pair standing two behind Nadal.

But Federer plays with a sense of history after 11 grand slam titles and near total domination game for the past three seasons.

Despite failing to close out a victory and keep his 16-match win streak in Canada alive, the 26-year-old was far from concerned, calling the loss "insignificant."

"The goal this season was to win Wimbledon -- done that," he said. "Try to stay No. 1 in the world -- it would have helped to win today.

"But you can't have it all. I'm looking at the US Open, looking down the road as well, the (November) Masters Cup. There's still a long way to go.

"I can't start being disappointed about just one match. He played well. I couldn't get the job done."

For Djokovic, however, the victory was a watershed.

"This is the best day of my career," said the overjoyed Djokovic, mistakenly introduced as Croatian during the trophy ceremony. "I won a major in Miami, but to beat the first and second of the world is unbelievable.

"I couldn't have asked for more, I played some impressive tennis this week."

Now Djokovic, who beat Federer for the first time in five tries, is headed back up the rankings.

"For me it was very important on the start of the year to perform well on the most important tournaments, the major ones, which I did.

"I showed it again. I show my quality. I deserve to be here right now," he said.

The youngster held his nerve in the deciding third set, beginning with a break and staying steady despite a Federer break-back in the eighth game.

The third seed ran away with the tiebreaker, with the Swiss saving one match point before going down as he chased a lob with an unsuccessful between-the-legs return.

Federer gave Djokovic due but refused to be over-awed by the next generation player who beat him.

"He's an up-and-coming youngster who is improving almost by the day. They learn a lot with all the matches they play, with the travelling.

"He definitely played great tournament. He's been able to back it up now since basically a year now.

"If he keeps this up he's going to create some chances also at the grand slams because, he's been to two semi-finals already (Roland Garros and Wimbledon this season).

"This obviously might be a breakthrough tournament for him," Federer said.

Federer, Nadal and Djokovic move on to Monday's start of the Cincinnati Masters, where a Federer-Djokovic re-play could be a semifinal offering.