The 24 year old has dropped just one shot so far this week and followed up his opening 64 with a 65 on Friday to move clear of Richard Bland, who also registered a 65.
Holman was playing in just his 16th European Tour event when he won the Australian PGA Championship in December and is now in the running to make it two wins in his first 20 starts.
Bland, in contrast, is looking for his first win at the 378th attempt but has yet to make a bogey this week and has made a steady start to the season, securing a tie for seventh at the Commercial Bank Qatar Masters.
Australian Holman followed his win on the Gold Coast with two top-40 finishes on the Desert Swing and he is now aiming for a victory outside of his homeland as he looks to move up the Official World Golf Ranking.
"After winning at home my next aim was to win a tournament overseas, so it's great to have the chance to tick that one off the list so soon," he said. "Then looking further ahead, getting into the top 100 in the World Ranking is a realistic aim.
It's why we play the game, to get ourselves in front and in with a chance of winning big tournaments - Nathan Holman
"When I saw I was three or four shots clear after the turn there were a few nerves, but I handled myself really well and managed to pick up a couple of birdies coming in."
Holman turned in 32 but really came to life after the turn, getting up-and-down from the right of the 13th green before dropping his first shot of the week on the next. He put his approaches on the 15th and 16th inside ten feet for two more birdies and then drained a 20-footer on the penultimate hole.
Bland already had birdies on the 13th, 15th and first when he knocked in a long putt on the second and followed it with a brilliant chip on the next to set up another birdie. A sixth birdie of the day came on the eighth and the Englishman joined Holman in sharing the low round of the day.
World Number 13 Danny Willett, Jorge Campillo, Soomin Lee and Miguel Tabuena were then all five shots behind the leader at eight under.
England's Willett battled to a 69 despite feeling ill with four birdies and two bogeys, while South Korean Lee had a single bogey in his 68.
Spaniard Campillo had five birdies and three bogeys in his 69, with Filipino Tabuena also shaking off illness in an unblemished 68 with birdies on the third, fourth and 13th.
Thongchai Jaidee and Marcus Fraser had a pair of 69s to sit seven under, with Andrew Dodt, Masahiro Kawamura and Thaworn Wiratchant a further shot back.
American Casey O'Toole holed a seven iron from 193 yards for a hole-in-one on the 12th which won him a million Hilton HHonors points.