'On this golf course, anything can happen,' said the 46-year-old Daniel, who became the oldest winner in tour history this year at the Canadian Women's Open. 'You can get it under and you can lose it pretty quickly.'
Cristie Kerr and Grace Park share second place after opening rounds of 6-under-par 66.
Annika Sorenstam, who established the original mark of 62 in winning last year's event, played in the same group as Daniel and shot a 5-under 67. She is tied for fourth place with Kelli Kuehne, Tammie Green and Mi-Hyun Kim.
Daniel tallied five pars to open her round but caught fire after that. She holed a 36-foot birdie putt at six, sank a two-putt birdie from 15 feet at seven and made it three in a row with a six-footer for birdie at the par-3 eighth.
After a par at nine, Daniel continued to birdie. She knocked a 9-iron to seven feet to set up birdies at both 10 and 11, but parred No. 12. Daniel rolled home a 40-footer for birdie at the 13th then added two more for her second string of three straight birdies.
Daniel parred the 16th but played a 6-iron to 12 feet to set up a birdie at the 17th. She matched Sorenstam's year-old record at 18 when she converted a 14-foot birdie try.
'I was just really on with the putter today, and to have a lot of putts downhill too,' said Daniel. 'You just don't make a lot of downhillers on this course. The greens can be frustrating but when you're stroking it well, it's fun to see that ball just roll.'
Sorenstam bogeyed the first hole but tallied six birdies the rest of the way for her round of 67. She played a brilliant second shot to 15 feet at the par-5 10th but missed the eagle and her birdie putt coming back.
'Sometimes that happens but you can't dwell on those things,' said Sorenstam. 'It's always good to play with someone that good to get the momentum going. 'When you have greens this pure, you're going to see some low scores.'
Kerr mixed nine birdies and three bogeys in her round Friday and despite the nine birdies, still trails Daniel, a teammate two weeks ago at the Solheim Cup, by four strokes.
'That's insane,' said Kerr. 'She played great. There's a lot of golf left. It would be kind of hard to shoot another 10-under to back it up, but it's definitely possible.'
Park was more consistent than Kerr on Friday. She birdied five holes in a row from the third and with all but one putt coming from longer than 10 feet. Park tapped in for birdie at the seventh and ran home an eight-footer for birdie at the 12th to join Kerr in second place.
'I'm very pleased with the way I played today,' said Park. 'My ball striking wasn't the best out there, in fact, it was horrible out there but my putting was one of the best days this year.'
Se Ri Pak, Sherri Steinhauer, Yu Ping Lin, Leta Lindley, Kathryn Marshall and Soo-Yun Kang share eighth place at 4-under-par 68.
Michelle Wie, the 13-year-old amateur playing this week on a sponsor's exemption, carded a 3-under-par 69 and is tied for 14th with such players as Rosie Jones, Laura Davies and Karrie Webb.