Working magic with his putter, Day fired 5-under 65 to be tied third with Emiliano Grillo on 7-under the card, just two shots behind leaders Jimmy Walker and Robert Streb.
Coming to the par-4 7th, Day was even par for his round but almost saw his chance of winning back-to-back PGA titles undone when he doubled the hole.
However showing the determination he has become known for and firing up his putter, Day reeled off seven birdies in his next eight hole.
Baltusrol was buzzing with Day chasing down the leaders, but two wayward tee shots on the 17th and 18th saw him unable to capitalise on the par-5 holes.
It was an incredible display of golf which has Day within striking distance heading into the weekend.
Adam Scott snuck under the radar during the second round but a 3-under 67 has him just outside the top-10 with two rounds to play.
Even par rounds from Scott Hend and John Senden place them at T21 on 2-under the card, with Marcus Fraser a shot further back.
Aaron Baddeley has recorded two even par rounds to ensure his participation on the weekend.
Matt Jones battled to join him with a 2-under in the second round see him make the cut on the number.
Greg Chalmers will be the only Aussie to miss the weekend action after rounds of 72 and 75 cut his PGA Championship campaign short.
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