Tom Lehman posted his second straight 66 to take second place at minus-12. Hank Kuehne posted one of the best rounds of the day as he fired an 8-under 64. He shares third place at 11-under-par 133 with Skip Kendall (67), Kirk Triplett (67) and Cameron Beckman (65).
Vijay Singh, the world No. 1 and defending champion, carded a 1-under 71 and stands at 7-under-par 137 in a tie for 28th. Singh battled his swing throughout his round and managed just three birdies and two bogeys.
Baird began on the 10th tee at the Palm Golf Club, which along with the Magnolia Course is being used for the first two rounds. The final two rounds will be played on the Magnolia Course. Baird moved into red figures with a birdie at the par-5 11th, his second.
The 32-year-old Baird then dropped in back-to-back birdies from the 14th to climb to minus-10. He stumbled to a bogey at the next, but erased that mistake with a birdie on the par-4 17th.
Baird, who owns one win on the Nationwide Tour, grabbed a share of the lead with a birdie at the par-5 first. He took the outright lead when he stuck his second shot within 3 feet of the cup at the sixth.
He sank that birdie to move to 12 under. Baird came right back with a birdie on seven to move two clear of the field. He parred his final two holes while Lehman made his charge.
'There's a lot of birdies to be had out there,' Baird said. 'Obviously the scores are going to be low. The mindset going into the weekend won't change. I probably need to make another 12 to 15 birdies to have any chance at winning the golf tournament.'
Lehman took to the Magnolia Course on Friday and got off to a poor start as he bogeyed the first. The 1996 British Open champion quickly rebounded from there. He ran off three straight birdies from the par-3 third to move to minus-8.
The 45-year-old Lehman kept rolling with a birdie at the seventh. He came back to birdie No. 10 to get to minus-10. Lehman, who owns five PGA Tour wins, collected birdies at the 14th and 17th to climb into second place.
'I think the mindset in this tournament is like a sprint. That's the way I look at it,' said Lehman. 'You have all these guys lined up and they're sprinting to see who can make the most birdies. Some tournaments are like a marathon where you've got to pace yourself and have patience.
'This one is more like the 400 meters. You've got to put the pedal to the metal and go as hard as you can for four days and make as many birdies as you can. A lot of guys up close, a lot of guys near the lead, a lot of guys low, and there's going to be some low scores.'
Chris DiMarco used a 65 to move to 10-under-par 134. He shares seventh place with Brenden Pappas, Harrison Frazar and Vaughn Taylor.
J.L. Lewis, the first round leader, stumbled to a 1-over 73. He is joined at 9-under-par 135 by Geoff Ogilvy, Stuart Appleby, Scott Verplank, Mark Hensby, John Huston, Richard S. Johnson and Jerry Kelly.
The cut line fell at 4-under-par 140 with 86 players moving on to the weekend. Among those who missed the cut were John Daly (141), European Ryder Cupper Ian Poulter (142), as well as David Duval and European Ryder Cup captain Bernhard Langer, who both finished at 150.