Donald and co-overnight leader Brett Rumford, who shot a 5-under 67, are tied for first place at 12-under-par 132 heading into the weekend.
Angel Cabrera and Simon Khan are one stroke further back in third place at 11- under-par 133, but both made late mistakes that cost them at least a share of the lead.
Cabrera, who shared the overnight lead with Rumford and Robert-Jan Derksen, stumbled to a double bogey at the 16th and settled for a 68. Khan bogeyed the 18th to finish with a 65 after shooting a 30 on the front nine.
Derksen shot a 3-under 69 and leads a group of four players tied for fifth place at minus-10. The others are Bradley Dredge (67), Ricardo Gonzalez (67) and David Howell (68).
Donald started the round tied for 13th place at minus-5, but he quickly began climbing the leaderboard after teeing off in one of the last groups off the first tee. Outside of a 10-footer at No. 3, he never had more than a tap-in for par.
'It was one of those days where I felt like I saw a shot, hit a shot and it turned out how I wanted to play the shot,' said Donald, who is looking for his first victory of the season.
Donald collected the first of his seven birdies at the par-3 second to move to 6 under. Back-to-back pars were followed by consecutive birdies at the fifth and sixth, and the Englishman made the turn at 9 under after another birdie at No. 9.
He then strung together five straight pars to begin the back nine before posting birdies at the 15th and 16th -- both par-4s -- to reach minus-11. Donald finished off his round in style with a birdie at the par-5 last to join Rumford in the lead.
'It was one of those fun days to play golf,' said Donald.
Rumford began his round on the front nine nearly six hours before Donald, and the Australian played his first nine holes at minus-4 after birdies at the third, fourth, sixth and ninth.
That put Rumford at minus-11, and he picked up another stroke with a birdie at the par-5 11th. His only bogey of the day came at No. 13, a 371-yard par-4, but Rumford got that stroke back with a birdie at the last.
Like Donald, Rumford is also looking for his first victory of the year. But unlike Donald, who finished sixth at the NEC Invitational last weekend and fifth at the Barclays Scottish Open last month, Rumford has not been posting strong finishes.
In fact, he has not finished higher than a tie for 85th since the Smurfit European Open almost two months ago, when he tied for 19th.
'I have tried to put the problems of the last few weeks in the past and tried to concentrate on this week,' said Rumford. 'That is all I am concerned with. I am leading a golf tournament and that is all I should be focusing on at the moment. This week and this week only.'
Along with Donald and Khan, David Carter was the third player to shoot the day's low round of 65. He is tied for ninth place at minus-9 with Martin Erlandsson (67), Stephen Gallacher (66), Jonathan Lomas (66) and Ian Poulter (69).
Padraig Harrington, who is the highest-ranked player in the field at No. 11, leads a group of seven golfers knotted one stroke further back in 14th place.
Defending champion Miguel Angel Jimenez recovered from an opening-round 74 to make the cut. Jimenez shot a 6-under 66 to end on the cut line at minus-4.