Cory Jefferson had a go-ahead putback in the waning moments and the 18th-ranked Bears rallied for a 67-66 victory in the semifinals of the Maui Invitational.
"We led 1-zip and we finished leading by one," Baylor coach Scott Drew said. "Everything else was chasing Dayton."
The Bears will play No. 8 Syracuse for the tournament championship Wednesday night.
After trailing nearly the entire game, Baylor (6-0) whittled away a 10-point deficit over the final seven minutes. The Bears were down by one when Kenny Chery missed a jumper off the front of the rim, but Jefferson was all alone for the rebound and his layup gave Baylor a 67-66 lead with 16 seconds to go.
Vee Sanford missed a contested shot in close for Dayton with two seconds left, Devin Oliver's tip-in attempt bounced off the rim and Baylor grabbed the rebound as the final buzzer sounded.
"I don't know how I missed it," Oliver said.
Royce O'Neale and Chery had 13 points each for the Bears. Jefferson, Gary Franklin and Isaiah Austin added 10 apiece.
"We just wanted to be tough. Our mental toughness was in question as a team, so we just wanted to stay together, be tough and try to pull one out and that's what we did," Chery said.
Jordan Sibert led Dayton (5-1) with 20 points and Oliver had 14.
Baylor trailed by 14 with less than five minutes left in the first half before going on a nine-point run to cut it to 33-28 at halftime.
The Flyers built the lead back up over the first part of the second half behind Sibert, but missed seven of their last 10 shots.
"For about 30 minutes in that game our guys looked about as good as any team in college basketball," Dayton coach Archie Miller said.
But he thought the Flyers lost the necessary intensity in the final minutes of the game.
"We just gave them too many opportunities to slice into us," Miller said.
O'Neale's 3-pointer trimmed Dayton's lead to 63-62 with 2:19 remaining. Oliver answered with a 3 but then Franklin hit from beyond the arc to make it 66-65 with 1:22 to play.
After a Baylor timeout, Oliver missed a jumper and the Bears grabbed the rebound.
Baylor shot just under 58 percent in the second half after shooting less than 42 percent before the break. The Bears finished 25 of 50.
"It was a great game to watch, a typical Maui-type game," Drew said.
Despite playing from behind most of the game, Baylor had more second-chance points and points off turnovers than the Flyers.
Dayton, which didn't receive any votes in the latest Associated Press Top 25 poll, was trying for its second upset of a ranked team in two nights. The Flyers beat No. 11 Gonzaga in the first round of the tournament Monday.
Dayton will play California in the third-place game.