TOLEDO, Ohio (Ticker) -- Laura Diaz, seeking her third win of the year, carded a 7-under 64 on Friday to open a two-stroke lead midway through the $1 million Jamie Farr Kroger Classic at Highland Meadows Golf Club.

The two-time LPGA champion, who started the day tied for 14th after shooting a first-round 70, completed 36 holes at 8-under 134.

"This is a great tournament," said Diaz, who finished fifth here last year. "It's one of my favorites. I've had some good years here. The people here are very welcoming and I've always enjoyed this course and I look forward to the next two days."

Tour veteran Kris Tschetter is in a three-way tie for second with rookies Beth Bauer and Jeanne-Marie Busuttil at 6-under 136.

Australian Karie Webb and Kelli Kuehne are tied for fifth at 137, one stroke ahead of Vicki Goetze-Ackerman and Donna Andrews. Korean Se Ri Pak, a three-time winner here, is among seven players tied for ninth at 139.

First-round leader Rachel Teske struggled to a 2-over 73 and dropped to a tie for 16th at 140.

Fourth on the money list, Diaz is one of only four multiple winners on tour this year, joining Sweden's Annika Sorenstam, Pak and Juli Inkster. She won the Welch's/Circle K Championship in March and the LPGA Corning Classic in late May.

Sorenstam and Inkster, who captured last week's U.S Women's Open, are skipping this event.

Nancy Lopez, who is retiring at the end of the year, gave the crowd a thrill by recording an ace on the 134-yard sixth hole. Despite the hole-in-one, Lopez is 10 shots behind Diaz after posting a 1-under 70.

"Nancy Lopez is an inspiration to us all," Diaz said. "She is one of my personal heroes. I've looked up to her all my life. She played in front of me today. It was a great hole-in-one she had today. It is great to see her play well. It's going to be sad when she is not around as much."

Nobody played better than Diaz, who posted seven birdies and no bogeys to post the low round of her career. She matched her previous career low with a 65 earlier this year at the Evian Masters, where she tied for fourth.

After sinking a 12-foot birdie putt on No. 13, Diaz reeleed off three straight birdies on Nos. 16-18 to make the turn at 4-under. She added three birdies on the front, holing a nine-footer on No. 2, an 18-footer on No. 6 and a 12-footer on No. 9.

"The 65 in Evian was because I hit a lot of close shots," Diaz said. "Today was more making 15-18-footers to shoot 64, and that makes me feel good about my putting."

Tschetter, who captured her only career win at the 1992 Northgate Computer Classic, followed up a 69 with a bogey-free 67, holing four birdie putts of at least 14 feet.

Also starting on the back, she birdied Nos. 12 and 15, both par-4s, to make the turn at 2-under, then birdied both par-3s on the front.

Tschetter sank a 30-footer on No. 2 and a 15-footer on No. 8 to get within two shots of the lead.

"I was laughing because I played so bad in the Pro-Am," said the Virginia native, who has bounced back from left hip surgery two years ago. "One of my partners, Steve Kelly, the comedian, is probably saying he can't believe I'm at 6-under."

Bauer ranks 34th on the money list and is battling 19-year-old Natalie Gulbis for Rookie of the Year honors. She has come a long way after spending last year on the Futures Tour, a route she was forced to take after failing to get her card at qualifying school in 2000.

"I didn't have a choice," said Bauer, who matched Tschetter's 67 with four birdies and no bogeys. "I had to join the Futures Tour last year. It turned out to be a great experience and I gained a lot of confidence. It was really good for my game. I got used to traveling and the things we didn't have in college."

Busuttil has earned only $20,954 in 13 events this year, ranking a distant 122nd on the money list, a mark she has a chance to improve this weekend.

"It's been a dream to be out here, but it hasn't been everything I wanted it to be because I haven't played the way I wanted to early," she said. "I knew it would be an adjustment. It seems like it took half the season to feel comfortable, but it has been unbelievable."

Busuttil stayed in contention with her second straight 68, but it was an erratic round that featured six birdies, a double bogey on the par-4 first hole and a bogey on the par-5 seventh.

Starting on the back, Busuttil birdied four of the first seven holes to get to 7-under for the tournament. She got back to 8-under with consecutive birdies on Nos. 2-3, but lost a another shot with the bogey on No. 7.