The 30-year-old journeyman — ranked a lowly 673rd in the world — followed up his opening 67 on Thursday with five birdies and two bogeys to edge clear of the field at seven under after 36 holes at the Quail Hollow Club layout.
Malnati, who is chasing only his second victory on the PGA Tour, attributed his smooth start to a more laidback approach to his game.
“Honestly, the biggest thing that’s different for me this week from the last couple of years is I’m just more relaxed,” Malnati said.
“I’m feeling good. I’m confident in what I’m doing and kind of been letting it show on the course, rather getting stressed out.”
Malnati also benefited from a nerveless putting display. Three of his birdies came after draining putts ranging nine feet to 12 feet.
“I expect a lot of myself as a player so I’m thinking about the couple that I missed out there,” Malnati said.
“I’m putting well. It’s fun to putt on greens where you get on line and just watch it roll end-over-end, and hopefully go right in the hole.”
Malnati will have little room for error over the weekend however, with a chasing pack including some heavyweight rivals lurking on his shoulder.
They include Australia’s former world number one Jason Day, who is one adrift of the lead on six under.
Day produced a sparkling four-under-par 67 which included three birdies and a magnificent eagle three at the par-five 10th hole, chipping in from a greenside bunker from 32 yards. A lone bogey on the 11th was the only blemish of an otherwise impressive round from the world number 14.
– McIlroy struggles, Woods in –
Day was joined on six under by American Aaron Wise, who repeated his first round 68 to claim a share of second place.
England’s Paul Casey meanwhile was two off the lead with South Africa’s Charl Schwartzel on five under.
Casey shot a three-under-par 68 including four birdies and a bogey while Schwartzel finished with a 67 following his opening 70 on Thursday.
Johnson Wagner was a shot back as the sole occupant of sixth place on four under, just ahead of seven players on three under.
Meanwhile, Northern Ireland’s Rory McIlroy saw his chances of grabbing a third victory at Quail Hollow fade after a disastrous second round, making it a birthday to forget as he turned 29.
McIlroy had started the day firmly in the hunt after an opening 68, but the wheels came off spectacularly with a five-over-par 76.
McIlroy’s round began with an opening bogey on his first hole, and it got progressively worse. A further bogey on the fifth was offset by a birdie on the ninth, but a double-bogey on 11th saw him slide to three over for the day.
He picked up a shot with a birdie on the 12th but three more bogeys in the closing five holes left him at two over for the tournament, nine shots off the lead.
Tiger Woods meanwhile scraped inside the cut line with a two-over-par 73 to leave himself on two-over 144.
Woods is making a comeback after years of nagging back injuries, a spinal fusion having helped him play again without pain and move into contention for the first time in years.
On Friday, Woods began off the 10th tee and took bogeys at the par-four 11th and 14th holes, missing par putts of seven and eight feet.
He parred his way around until missing a four-footer to bogey the par-three sixth hole then missed a six-foot birdie bid at seven before making his closing birdie.
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