The 30-year-old, who led by one overnight, was knocked off the top of the leaderboard by fellow Englishman John Parry before he started play but he hardly looked back after a birdie at the first.
He followed with another birdie at the fourth and an eagle three at the sixth. He did also drop three shots in the first 10 holes but three more birdies on the back nine cancelled them out as he reached the halfway point at 12 under at Himmerland Resort.
Parry also carded a 67 and ended the day in a tie for second on nine under, alongside Australian Richard Green.
Welshman Bradley Dredge, last year’s runner-up, and another Australian, Terry Pilkadaris, were joint-fourth on eight under after shooting 68s.
Peter Lawrie is best of the Irish, his 69 putting him on seven under, five shots behind Horsey. Horsey, who is chasing a fourth European Tour win but has had just one top-10 finish this year.
Parry made a superb start to his second round and reached 11 under after sinking six birdies in his first 15 holes. He slipped up with bogeys on two of his last three. Green climbing the leaderboard with a bogey-free 65.
Welshman Oliver Farr, who began the day second, finished with two birdies to shoot level-par 71 and sit on seven under alongside Ireland’s Peter Lawrie, who signed for a 69.
European Ryder Cup captain Darren Clarke is three under, as is Simon Thornton while Kevin Phelan is a shot further back. Michael Hoey and Damien McGrane missed the cut.