"I was thinking 10-under par," he said.
But Olazabal two-putted for par and had to settle for a 9-under 63, which broke the course record by two shots and tied the lowest score ever in a major tournament.
"That was one heck of a nice round," Olazabal's playing partner, Blaine McCallister, said as the two walked off the green.
Olazabal was even par to start the third round at Valhalla Golf Club and 11 strokes behind Tiger Woods. He became the 18th player to record a 63 in a major, and the first since Greg Norman in the first round of the 1996 Masters. Norman also accomplished the feat in the 1986 British Open.
The last player to shoot 63 in the PGA was Brad Faxon, in the final round at Riviera in 1995.
More than tying a record, however, the two-time Masters champion gave himself a chance to win the PGA Championship. He finished at 9-under 207.
"As the round went on, I liked my chances a little better," said Olazabal, who missed the cut last week in the Buick Open. "I wish I had played the first day like I did yesterday and I wouldn't be lying six or seven behind."
Olazabal said his tee shots were the key to his round. He missed only one fairway on the par-5 second - and repeatedly followed perfect drives with precision iron shots.
"I don't feel like I made a lot of putts from long range," he said. "It was a matter of hitting great iron shots. I hit fairways and gave myself a chance to attack the flags. And I have to say, my iron play was awesome."
He scrambled for a birdie on No. 2 and added birdies on Nos. 4, 9 and 10.
"I knew around 10, that if I could keep on playing the same way, with the same quality shots, it was going to be a special day," he said.
Olazabal sank short birdie putts on Nos. 12, 13, 15 and 16 before missing a 15-footer by inches at No. 17. He clutched the bill of his cap and cursed after the putt rolled past the hole.
"I hit a lovely putt. I thought it was in all the way," Olazabal said.
While Valhalla was yielding low scores, the 63 was still somewhat of a surprise coming from Olazabal. He opened with a 76 and was trying Friday only to make the cut. And last week in the Buick Open, he had an 81, his worst score of the year.
"It has been a long time since I reall have enjoyed a round this much on a golf course," Olazabal said. "To me, that is the most important thing."
Olazabal has won one tournament this year, the Benson & Hedges International on the European Tour. He has become increasingly frustrated in Europe, claiming tour officials are promoting Colin Montgomerie and other British players while virtually ignoring a man who has won two majors.
Olazabal is leaning toward playing a full schedule in America next year.
©2000 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed