Donald's 4-under 66 Friday was his 10th straight Nelson round in the 60s and put him at 7-under 133 through two rounds, a stroke ahead of defending champion Brett Wetterich (68), Fredrik Jacobson (67) and first-round leader Sean O'Hair (69).
It's the first time Donald has led at the end of any round at the Nelson, where 16 of his 20 career rounds over six tournaments have been under par.
Kent Jones (66) and Scott Verplank (68) were two strokes back, and Vijay Singh (67) was in a group of five players at 4 under.
This is the first time the tournament has been played without Byron Nelson, the champion golfer known as "Lord Byron" and in 1968 the first to have a PGA Tour event named after him. He died Sept. 26 at age 94.
During the third round this afternoon, play will stop for a moment of silence in honor of Nelson. There will also be a flyover by a squadron of fighter jets.
Donald took over sole possession of the lead with a 43-foot chip from the edge of the green at the 196-yard 17th. That was a hole after he missed his only fairway and had to settle for par at the 554-yard 16th, the easiest at the TPC Four Seasons.
Wetterich's bogey-free round came at Cottonwood Valley, the course across the street that hosted its final Nelson rounds Friday. The tournament is returning to a one-course format next year after a multimillion-dollar design at the TPC.
MORELIA, Mexico - Lorena Ochoa struggled in her second round as the No. 1 player in the world, shooting a 1-over 74 in windy conditions to drop five strokes behind the leaders in the Corona Morelia Championship.
Angela Park (65), Yu Ping Lin (65), and Silvia Cavalleri (68) shared the lead at 9-under 137 on the hilly Tres Marias course.
Sarah Lee matched the LPGA Tour record for relation to par for nine holes, shooting an 8-under 28 on the front nine - her final nine - en route to a 66. She was a stroke behind the leader at 8 under.
Ochoa, the defending champion who took the top spot in the rankings from Annika Sorenstam on Monday, had four birdies and five bogeys. She struggled with her putting and also left herself in difficult positions with some poor approach shots.
Park birdied her final five holes.