The third-seeded Blue Devils (24-6) used a 14-0 surge to take a 75-69 lead on a three-pointer by freshman J.J. Redick with 1:10 to play.
"Our foul trouble was really crippling," said N.C. State Coach Herb Sendek. "Guys were trying to play good, solid, hard-nosed defense without picking up their fifth foul. During that time, we didn't have the same defensive stopping ability that we had at other points in the game. We were in deep foul trouble, and Duke recognized that and they continued to attack it."
Redick had a huge second half, scoring 23 of game-high 30 points.
His heroics trumped N.C. State center Josh Powell, who had a team-high 26 for the Wolfpack.
"The Duke huddle was like this -- coach talked and we listened," Redick said. "He told us to maintain the belief and that we were going to win the game. We put our heart and soul into this game. A lot of it had to do with Coach K. He told us to remain calm and to concentrate on transition and penetrating. The good opportunities came, and we took advantage of them."
"We always knew that a run was going to happen," said a glum Powell. "The coaching staff told us that a run was coming and just to stay focused."
With the victory, Duke ran its string of winning the tournament to five straight. No current member of the Blue Devil squad has ever lost an ACC Tournament contest.
"I'm speechless," Redick said. "To go out like this in my first year is just unbelievable."
North Carolina State (18-12), seeded fourth, was trying to muscle its way into the field of 65. They came into the nation's premier conference tournament needing a solid showing to lock up an NCAA bid, but collapsed down the stretch in the title game.
The Wolfpack could not hold on in the end because of foul trouble and a lack of composure. The Blue Devils regained their shooting touch and defensive furor because fouls and mistakes forced NCSU to play tentatively and haphazardly late in the contest.
A layup by Marcus Melvin gave N.C. State its biggest lead of the first half at 22-15 at 10:01.
State still led by seven, 36-29, on a jumper by Scooter Sherrill at :37.
Like they did in earlier win over the Blue Devils, the Wolfpack turned the tables on Duke, playing aggressive defense and showing no fear.
State led, 36-31, at the break. It shot 48.1 percent from the floor. It had eight turnovers and contained Duke's three-point shooting (4-of-13), else its lead would have been bigger.
Duke shot just 39.3 from the floor overall, committed six turnovers, and lost the rebounding battle, 18-15.
Redick and Daniel Ewing, the tournament MVP, each had seven points. Ewing finished with 11, but had a career-high 32 in the first-round win over Virginia.
"This is great, better than last year's (title) for me because I was more of a part of it," Ewing said. "Winning the award is great, but I couldn't have done it without my teammates. A lot of guys picked it up for us today. I'm proud for myself and my team."
Sherrill had 11 and Melvin 10 for the Wolfpack. Melvin hit a three-pointer as the shot clock ran out, giving NCSU a 34-29 edge with 1:11 left in the first half.
Duke started quickly in the second half, cutting its deficit to two, but back-to-back three-point plays by Josh Powell made it 48-38 at 14:29.
Two free throws by Hodge, who had 17, gave the Pack a 52-38 lead at 12:48, and a three-pointer by Powell gave State its biggest lead, 55-40, at 11:44 before the Duke comeback.
The Pack held Duke without a field goal for nearly eight minutes in the second half, and Powell scored 13 points in the half's first nine minutes.
Then, Duke took advantage of foul problems for Hodge and Powell to run off nine straight points to cut it to 55-49 at 9:26, came as close as three twice, and to within one at 69-68 at 3:15 on a dunk by Dahntay Jones, who had 18.
"I think of the five ACC championships, this team played with the most heart," said Duke Coach Mike Krzyzewski. "What a tremendous second half against a terrific N.C. State team. I mean, we both played great. They are not a loser in this game."
"This is a hard loss for us right now," Hodge said. "We're going to turn it into something positive as we head into postseason play."
Ultimately, Duke recovered to shoot 82 percent (27-of-33) from the free-throw line, making 22-of-26 in the final 20 minutes. The Wolfpack were 77 percent (20-of-26) from the line.
The contest was a rematch of last year's title game. In the 50-year history of the ACC Tournament, the same two teams had met in the finals in back-to-back years seven times previously. In five of those rematches, the team that lost the first year rebounded to win the rematch, but NCSU came up short.
N.C. State was the first team in ACC Tournament history to make it to the title game as the fourth seed in back-to-back seasons.