Stadler's two-round total of 128 established a new 36-hole scoring record. The old record of 130 was done three times -- first by J.P. Hayes and Bill Muchison in 1994, then by Stewart Cink in 1996.
First-round leader Scott Dunlap carded a 4-under 67 and is alone in second at minus-12. Mario Tiziani (64) and Jamie Broce (66) share third place at 11-under-par 131.
Australian Jarrod Lyle is by himself in fifth at minus-10 after a 67 in round two. Jason Allred posted a 68 and is in sixth at 9-under-par 133.
Stadler got off to a hot start with birdies on two and three. He got to 10 under with a birdie on the par-4 fifth at Hillcrest Country Club.
The 26-year-old ran home a 25-footer for birdie on seven, then sank an 18-foot birdie try on eight to join Dunlap in the lead at minus-12.
Stadler, who claimed his third Nationwide Tour title earlier this year at the Xerox Classic, drained another long birdie effort on the 10th. He dropped a shot on the 14th, but quickly rebounded.
At the short par-4 15th, Stadler found a greenside bunker off the tee. He blasted out, then rolled in the birdie putt to regain the outright lead. Stadler came right back with a birdie on the par-5 16th to move two clear of Dunlap. He parred the final two holes to remain there.
'It's better than trailing. It doesn't mean anything,' Stadler said of the first two rounds. 'It means you've got off to a good start, there's two rounds left. It's a great spot to be, but I could be leading or I could be five back, I'm still going to play the course the same way.'
Stadler currently stands 18th on the Nationwide Tour money list and a win this week would all but guarantee him earning his PGA TOUR card for next year, as the top-20 on the final Nationwide Tour money list gain their PGA TOUR cards for 2007.
Dunlap started on the back nine and birdied two of his first three holes. However, he gave both of those strokes back as he bogeyed 13 and 14.
The 43-year-old again got to 10-under as he holed out for eagle on the par-4 first. Dunlap came right back to birdie No. 2 and climbed to 12-under with a birdie at the sixth. He parred out to remain there.
Dan Olsen, who double-eagled the par-5 16th, fired a 7-under 64 to jump into a tie for seventh at 8-under-par 134. He was joined there by Glen Day (67) and former U.S. Amateur champion Jeff Quinney (65).
'Out here it's hard to make a 20-foot putt, let alone a long shot like that,' admitted Olsen. 'When it goes in it makes you feel a little bit invincible, it's very cool. I'm on the cut line and I go from 1-under to 4-under right there. The guys are so good out here and the guys who win catch a wave and ride it.'
Ricky Barnes, another former U.S. Amateur winner, was joined by Jeff Freeman, Brendon De Jonge and Andrew Buckle at minus-7in a share of 10th place.
The cut line fell at 3-under-par 139 with 60 players moving on to the weekend. Nine players in the top-20 on the money list missed the cut. Among them were No. 13 Doug LaBelle II (140), No. 17 John Merrick and No. 19 Hunter Haas both at even-par 142 and No. 15 Brendan Pappas (143).