In an up-and-down day, the Englishman started with a bogey at the first hole, recorded six consecutive pars and mixed in five birdies for a 54-hole total of 9-under 207, one-shot better than compatriot Richard Finch (65).
In 2007, Dredge lost this event to Ireland native Padraig Harrington in a playoff.
"I would love to go out tomorrow and see things going my way," Dredge said. "I certainly don't want to go into a playoff with an Irishman, let's put it that way!"
At 7-under 209, England's Lee Westwood is alone in third place, while Sweden's Robert Karlsson (69), David Frost (66) of South Africa and Chile's Felipe Aguilar (67) share fourth place at 6-under 210.
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