Bay captain Jacob Smith, at first change, took 2-14 from six overs while opening seamer Liam Dudding claimed 1-11 from seven overs, including two maidens.
Dudding and Smith had struck early to have North Otago at 46-3 in 20 overs.
The Colin Schaw-coached Bay side's collective ability was put to the test to eke out a first-innings victory but it doesn't seem to matter as rain is unlikely as the match threatens to be done and dusted by tomorrow.
Opener Lachie Kingan top scored for the cup holders with 37 runs and No 5 Jeremy Smith posted 25 runs on an "up-and-down" wicket.
Ironically, the two innings had a Smith versus Smith scenario unfolding in the two innings.
Jeremy got Jacob's wicket as a bowler and the latter got the former's scalp with a catch off a Pretorius delivery.
Earlier, the Bay were in dire straits after losing seven wickets for 100 runs at lunch.
North Otago, chasing a historic first defence, won the toss and had the Bay padding up but only four Bay batsmen got into double figures.
After 15 overs at drinks, they were 3-65 with the hosts, remarkably, employing only three bowlers to do the job.
North Otago's South African import, Francois Mostert, had claimed the wicket of opening batsman Matt Edmondson for nine runs, caught Brady Kingpan.
Jeremy Smith nailed the other three early scalps -- No 3 Rupert Young lost his furniture for 10 runs, No 4 Indika Senarathne returned to the changing rooms for a two-ball duck after playing a shot down the throat of Jerimiah Shields and Smith failed to carry on from a solid start.
The collapse continued to lunch with Christian Leopard, Angus Schaw and Pretorius departing cheaply.
Right-arm fast Mostert finished with the figures of 4-65 from 13.4 overs, including a maiden, in the first innings as well as the scalps of Edmondson and Patel in the second dig.
Jeremy Smith claimed 3-21 from 10 overs, including four maidens, while fellow right-arm medium pacer Ben Cant emulated his figures, albeit bleeding 34 runs.
Coach Schaw named Dominic Thompson his batting 12th man. Cameron Grubb is running out the snake lollies for the Penguins.