After a bogey at No. 17, Donald made a par-saving putt on the closing hole Saturday to finish his 11th straight under-par round in the Nelson, a 3-under 67 that put him at 10-under 200 with a one-stroke lead over Scott Verplank going into the final round.
Donald, finally leading the Nelson after all his subpar rounds in the event, had consecutive bogeys early to fall behind by two strokes. The Englishman recovered with five birdies in a 10-hole stretch that were enough to put him back ahead.
Verplank (66) grew up in the Dallas area and first met Byron Nelson as a teenager. Now in his 21st Nelson, the 43-year-old Verplank will play in the final group Sunday with a chance to finally win it -- in the first Nelson tournament played without its namesake.
Play was stopped midway through the round for a moment of silence in honor of Nelson that was followed by a flyover by a squadron of fighter jets. It was the first time the PGA Tour ever had such a stoppage during a tournament.
Nelson, who in 1968 became the first golfer to have a PGA TOUR event named after him, died Sept. 26. He was 94.
Donald had never finished a round leading the Nelson before this year, but has now led two in a row -- even after his tee shot at the 196-yard 17th hole wound up in the bunker fronting the pin and his approach at the closing hole ended up more than 50 feet from the pin before a 5-foot par putt.
If Donald can make it three rounds in a row with the lead, he will have his third PGA TOUR victory.
Michael Allen, the 48-year-old journeyman who got into the Nelson by surviving a playoff in a qualifying event Monday, was alone in third at 8 under after his bogey-free 64. Ian Poulter (65) was 6 under.
Phil Mickelson (66) and Vijay Singh (69), the only top-10 players in the world playing this week, were in a group at 5 under with Ken Duke (64), Ryuji Imada (67) and Fredrik Jacobson (71).
Donald, No. 11 in the world, has finished 17 of his 21 career rounds at the Nelson over the last six tournaments under par.
There was a quick birdie Saturday, hitting his approach at the 490-yard third hole within 5 feet, before Donald suddenly got in trouble and was over par for his round.
After missing the green at the 425-yard No. 4, Donald two-putted from 7 feet for bogey. Then at the elongated green on the 181-yard fifth, he three-putted from 57 feet to go to 7 under -- and was two strokes behind Verplank.
Donald got a stroke back with a birdie at the 533-yard seventh hole, then had four birdies in seven holes after making the turn. He hit his approach to 6 feet for birdie at No. 10, then slid a 10-foot birdie attempt past the hole at No. 11. Consecutive birdies at Nos. 13 and 14 got him to 10 under, and he had another at the 554-yard 16th -- the easiest hole on the course.
Verplank was bogey free until he got to No. 13, the par 3 where he didn't get on the green until his third shot. He missed the fairway at No. 15, then couldn't reach the green with his second shot.
But he had a nice finish with a nifty approach at No. 18 that set up a 4-foot birdie putt.
The closest Verplank came to a Nelson title was in 2001 when he lost in a four-hole playoff to Robert Damron.
Defending champion Brett Wetterich, the last Nelson winner to get a personal congratulation from Nelson at No. 18, twice had consecutive bogeys in a round of 72 that dropped him to 4 under and six strokes off the lead.
Beside the moment of silence Saturday, officials unveiled the design of the Congressional Gold Medal that will be presented posthumously to Nelson. The medal includes two images of Nelson, one a profile shot in his traditional fedora hat and the other is of a younger Nelson swinging a club and surrounded by the words 'Player, Teacher, Humanitarian, Champion.'
Donald's three-round total of 200 is the highest for a leader at the Nelson since 2000. The last time it was higher was in 1986, when Andy Bean had a 201 total through 54 holes on way to winning. ... Duke, the 38-year-old coming off his career-best runner-up finish last weekend in New Orleans, had a bogey-free 64 in the second group of the day. 'Don't wake me up here,' Duke joked. ... SMU golfer Colt Knost, the first amateur since Justin Leonard in 1993 to make the cut at the Nelson, followed his second-round 64 with a 74 on Saturday.