Five years ago the Englishman went 81-89 over the first two days of the Open de España at the 1997 Ryder Cup venue but after breaking 70 for the first time over the famous layout with a brilliant 65 on day two, he followed it up with a 67 to get to seven under.
Fitzpatrick's Ryder Cup team-mate Bernd Wiesberger was at two under alongside another Rolex Series winner in Min Woo Lee, Frenchman Romain Langasque, Italian Renato Paratore and Swede Sebastian Soderberg.
Edoardo Molinari was then at one under with just nine players under par.
Canter has won in Spain before, claiming the 2011 Spanish International Amateur Championship shortly before turning professional, although it took him a while to establish himself in the paid ranks.
A four time Qualifying School graduate in 2015, 2016, 2017 and 2019, the 31-year-old has three second place finishes in the last two seasons, including at the 2021 BMW PGA Championship.
A win in Sotogrande would truly establish him on the European Tour and he heads into the final 18 holes knowing that the last five 54 hole leaders with an advantage of two shots or more have gone on to win at Valderrama.
"The golf course doesn’t give you loads," he said. "Although, as we all know, there’s opportunities to drop shots here.
"I think what it means is I can go out tomorrow and play how I have these last couple of days. The score I end up on will be competitive, I think. That gives me a lot of confidence going in.
"The course is asking a lot of different challenges and you can’t dwell when it goes against you. I’m trying to stay as level as I can and I’m doing a good job."
Canter made a fast start, hitting a stunning approach to five feet at the first and holing a 20 footer at the second to lead by one.
The score I end up on will be competitive, I think. That gives me a lot of confidence going in
He dropped a shot on the third, failed to take advantage of the par five fifth and then made another bogey on the fifth but got back on track and into a share of the lead thanks to a tee shot to eight feet on the par three sixth.
He took on the short par four eighth and got up and down from the sand to lead on his own at the turn, and an approach to five feet at the tenth had him three ahead.
That advantage was trimmed to two but Canter made a two putt birdie from 38 feet at the par five 11th to once again lead by three.
Fitzpatrick had birdied the fifth with an approach to seven feet but also dropped shots on the first and sixth before he came to life after the turn.
The 27-year-old holed a right to lefter from the fringe at the tenth, chipped in at the 11th and made a 30 footer on the 12th to cut the lead to two and, while he dropped a shot after a poor tee shot on the 13th, Canter bogeyed the same hole with a three putt from distance.
The leader bounced back with a slippery 25 foot putt on the 15th but another three putt followed on the 16th before a huge drive up the last helped him set up a closing birdie from 12 feet.
Fitzpatrick is playing his first event since being part of the defeated European team at Whistling Straits and is looking for a seventh win in as many seasons on Tour.
"I’m excited to be in the final group," he said. "The aim at the start of the week is to be up there. It doesn’t get better than having a chance to win on Sunday. I’ll go out there and enjoy it.
"Valderrama was a real test today. I’m really pleased with the way I grinded it out and I’m happy with the one under.
"The most important thing around here is patience. You can’t chase anything. You can’t just get driver out and try and be aggressive. You’ve got to be sensible and it’s more important to not drop shots than it is to make birdies."
Lipsky bogeyed the first but sandwiched a birdie on the par five fourth with gains from seven feet at the second and fifth. He holed from the fringe at the seventh and then 27 feet at the eighth before completing the par five set at the 11th and 17th and putting an approach to nine feet at the last.
Overnight leader Langasque carded a 73, one shot more than playing partner Soderberg, while Lee carded a 67, Wiesberger registered a 68 and Paratore signed for a 70.