I pod disabled  and cant remember passcode. cannot use itunes as it wants update and restore  need to use passcode and the hold sleep/wake key and home key doesnt put it in DFU either . any help ?

My ipod has been disabled as I cant remember the passcode . When doing a restore on I Tunes it will only update and restore , the update doesnt work as the phone is locked and I need a passcode. I have tried the other way which is to hold the sleep/wake key and home key together  for 10 seconds but as soon as you plug it inot the pc the ipod boots up so this method doesnt work either . Very close to usin it as a brick , any suggestions ?? Thank you


Place the iOS device in Recovery Mode and then connect to your computer and restore via iTunes. The iPod will be erased.
iOS: Forgot passcode or device disabled
If recovery mode does not work try DFU mode.                        
How to put iPod touch / iPhone into DFU mode « Karthik's scribblings        
For how to restore:                                                             
iTunes: Restoring iOS software
To restore from backup see:
iOS: Back up and restore your iOS device with iCloud or iTunes       
If you restore from iCloud backup the apps will be automatically downloaded. If you restore from iTunes backup the apps and music have to be in the iTunes library since synced media like apps and music are not included in the backup of the iOS device that iTunes makes.
You can redownload most iTunes purchases by:                         
Downloading past purchases from the App Store, iBookstore, and iTunes Store        
If problem what happens or does not happen and when in the instructions? When you successfully get the iPod in recovery mode and connect to computer iTunes should say it found an iPod in recovery mode.
Dry another cable
Next try on another computer.
Make an appointment at the Genius Bar of an Apple store.
  Apple Retail Store - Genius Bar