Pappas, who earned the right to compete on tour after finishing fifth on the Buy.Com money list in 2001, birdied six of his final nine holes en route to a 9-under-par 63. His 54-hole total of 19-under 197 left him tied with Kirk Triplett and Duffy Waldorf.
Brandel Chamblee, Cameron Beckman, Jerry Kelly and second-round leader John Senden were a stroke back at 18-under. Kelly won his first PGA Tour event last week at the Sony Open in Hawaii. Jay Haas was alone in eighth at 199.
The 34-year-old Pappas has never finished higher than 12th in a PGA Tour event and his 63 was six strokes better than his best round this year. A former college teammate of John Daly, who was in 13th place, Pappas won just once on the Buy.Com Tour last year but recorded seven other top-10 finishes.
Triplett posted a bogey-free round Friday that featured four birdies on the front nine and four on the back nine. He has just one win on tour -- the 2000 Nissan Open.
Waldorf, who had five birdies on the back nine Friday, is seeking his fifth tour title. The 39-year-old Waldorf has just one bogey over the first 54 holes.
There were 19 rounds of 66 or better fired Friday over the four courses used for the tournament.