The world No. 1 Nadal won his 11th straight outing with a 6-1, 6-3 handling of former Australian Open runner-up Marcos Baghdatis of Cyprus, while the high- flying Djokovic moved to a brilliant 28-0 this year with a 6-3, 6-4 victory over tall South African Kevin Anderson. The reigning U.S. Open, Wimbledon and French Open champion Nadal recently titled on his beloved clay at the Monte Carlo Masters and in Barcelona.

Djokovic has won his last 30 matches overall, dating back to last year, and is now one win away from tying Ivan Lendl for the best-ever winning streak to open an ATP season. The great Lendl started his 1989 campaign at 29-0.

"It's a fact that I am playing the best tennis of my life and I'm definitely happy about it," Djokovic said.

The 23-year-old Djokovic is fresh off his title in his native Belgrade last week and seeking his sixth championship of the year.

Up next for the all-time Masters titles leader Nadal will be surging Argentine slugger Juan Martin del Potro, while Djokovic will battle Spaniard Guillermo Garcia-Lopez. The former world No. 4 and former U.S. Open champion del Potro was last week's winner in Estoril.

"I think he's the worst rival to have to face in the second outing of a tournament," Nadal said of del Potro.

Nadal beat the 16-time major champion Federer in last year's marquee Madrid finale. The two-time Madrid champion Federer was the reigning champ at the time.

A third-seeded Federer was forced to go the distance Wednesday, including saving a match point, in order to sneak past quality Spanish lefthander Feliciano Lopez 7-6 (15-13), 6-7 (1-7), 7-6 (9-7) in just under three hours. Federer and Lopez combined for 48 aces. including 25 for the winner. And each player could muster only one service break in the ultra-tight bout.

Lopez was last week's Belgrade runner-up to Djokovic.

Up next for Federer will be Belgian Xavier Malisse.

Meanwhile, fourth-seeded Brit Andy Murray held off former top-10 Frenchman Gilles Simon 6-4, 3-6, 6-0; fifth-seeded two-time French Open runner-up Robin Soderling leveled Colombian Santiago Giraldo 6-3, 6-3; seventh-seeded Wimbledon runner-up Tomas Berdych blew past Spanish wild card Marcel Granollers 6-4, 6-0; and an unseeded del Potro pasted Croat Marin Cilic 6-3, 6-0 on the red clay at the Magic Box. The 2011 Aussie Open runner-up Murray was a titlist here in Madrid in 2008.

Del Potro has won two of his last four tournaments and soared up to No. 32 in the world after opening 2011 at No. 257. The 6-foot-6 South American missed most of last season after undergoing wrist surgery.

"The game is going to be one of the most difficult you could face on clay, he's at home, playing really very well and hasn't lost on this surface for around two years," del Potro said of his scheduled Thursday battle with Nadal.

A Day-4 upset came when Spaniard Daniel Gimeno-Traver took out eighth-seeded Austrian Jurgen Melzer 7-6 (10-8), 6-3.

In other second-round play, Brazil's Thomas Bellucci bested German Florian Mayer 6-7 (5-7), 6-3, 3-0, Malisse mauled Taipei's Yen-Hsun Lu 6-2, 6-2, and Frenchman Michael Llodra drilled Italian qualifier Flavio Cipolla 6-4, 6-2. Mayer, last week's runner-up in Munich, retired in the third set against Bellucci, citing fatigue.

This week's big winner will collect $874,000.