The pair have history, with Hedwall winning the 2011 NSW Open in which Ko had a one shot lead heading down the last before three-putting the final green to miss out on the title by one shot.
Ko was the outright leader by two shots on the back nine today before she made consecutive bogeys on 12 and 13 to drop back to the pack. She righted the ship with a birdie on 14 and then hung on for a solid round and a chance of becoming the youngest player to win two titles on the LPGA Tour.
Ko has already continued her remarkable record of never missing a cut in 24 professional events since she made her debut in a pro event in the New Zealand Women's Open of 2010. She is also on track to record her eighth top-10 finish at professional events all around the world.
Meanwhile, Steven Alker has dropped two places on the Web.com Tour order of merit as he sits and watches the final two rounds of the season-ending Cox Classic in Omaha.
The 43-year-old, who missed the cut at the worst possible time with rounds of 71 and 75, is projected to drop to 26th on the money-list - the position no player wants. The top 25 players at the end of the Cox Classic on Monday morning (NZT) automatically qualify for the PGA Tour in 2014.
The Kiwi had two days to forget at the Champions Run Golf Club and now his fate is out of his hands with a number of players trying to jump him to inside the top 25.
Alker has made US$139,313 from 13 events in 2013 and the Web.com Tour has projected a benchmark of US$142,000, which has traditionally been safe.
Following this week, the top 25 will be joined by another 25 players who will earn their way onto the game's most lucrative tour through a new four-tournament playoff. The playoff takes the place of the tour's annual qualifying school.
Alker is hoping to join compatriots Danny Lee and Tim Wilkinson, who have already qualified for the PGA Tour, but he will have to endure an agonising wait tomorrow to see how his rivals perform.