The 44-year-old from West Kilbride, who won the national title back in 2012, came barging up the order with a sparkling eight-under 64, which was just a shot shy of equalling the course record.
That gave Fox a 15-under aggregate, with Craig Lee and defending champion Ross Cameron leading the chasing pack on 13-under.
Fox arrived at Deer Park with modest expectations due to his lack of competitive outings this season, but the former European Tour player is now on course to capture the cherished prize for a second time.
“Given how little I’ve played and how little I’ve practised, this is well beyond my expectations,” said Fox, who reeled off eight birdies in a superbly-assembled round. “But sometimes it’s better to have zero expectations.
“It would mean a lot to me to win this trophy again. The standard among the 10 or 15 at the top really is excellent. If you can beat them on any day, let alone over four days, then you deserve to give yourself a pat on the back.”
Cameron kept himself in the hunt to become the first player since Ross Drummond in 1990 to win back-to-back titles with a 68.
“I’m slap bang in there and I would’ve taken this at the start of the week. It’s all to play for,” said the Peterhead man.
Lee, a runner-up three times in the Scottish PGA Championship down the seasons, fired a 67 to keep his hopes very much alive.