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Dale Earnhardt before the start of the 2001 Daytona 500.

Polesitter Bill Elliott led the field to the green flag, but he only led one lap before Sterling Marlin (the winner of the first 125-mile qualifying race three days earlier) passed him for the lead. On lap 29, Rusty Wallace drove into his pit after his right front tire had suddenly gone flat. NASCAR determined that he had exceeded the pit road speed limit on his way in and he was consequently issued a 15-second penalty. As a result, he went a lap down and attempted to make up for it by skipping the first scheduled pit stop. The first caution came out on lap 49 when Jeff Purvis bounced off the wall between turns 3 & 4. The race restarted and stayed under a long green-flag run that lasted 105 laps, in which Ward Burton led the most. On lap 87, a famous moment in Kurt Busch's young career occurred, Dale Earnhardt and rookie Kurt Busch made door-to-door contact coming out of turn 4 while battling for fifth place. Earnhardt promptly flipped Busch the bird at 185 mph or, as described by lap-by-lap commentator Mike Joy, he simply was saying "Kurt, you're number 1".

The second caution came out on lap 157 when Busch, trying to pass Joe Nemechek, hit the turn 3 wall and slid across the track right through the infield and onto pit road. On lap 167, Steve Park took the lead, only to be passed by his teammate Michael Waltrip on the next lap.

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Dale Earnhardt's car photographed during the 2001 Daytona 500.

On lap 173, a huge crash eliminated 18 cars in a spectacular fashion. This began when Robby Gordon, coming onto the backstraightaway, turned Ward Burton in the outside lane. Burton then hit Tony Stewart, who turned back across the middle of the racetrack, collecting most of the field behind him. Stewart took the worst ride of any driver in that crash, as his car turned against the wall after being hit by Burton, caught a pocket of air, got pushed airborne over Robby Gordon and flipped over twice, and then landed on top of Jason Leffler before coasting to a stop in the infield. Bobby Labonte's hood broke off and got attached to Stewart's car, causing his engine to catch fire.

Stewart's vehicle was instantly described as something similar to Richard Petty's rollover crash in the 1988 race. Mark Martin collided first with the outside wall and then got hit by at least two other cars, destroying the rear end of his. Martin managed to limp his car back to pit road and abandon it. Also involved in this crash were Jeff Gordon, Terry Labonte, Andy Houston, Buckshot Jones, Dale Jarrett (the defending Daytona 500 winner), Jeff Burton, Elliott Sadler, Kenny Wallace, John Andretti, and Jerry Nadeau. Only a few drivers, including Earnhardt; Elliott; Ron Hornaday Jr.; and Ken Schrader, were able to avoid the crash with intact cars. The race was red-flagged for extensive cleanup.

Between the time of the lap 173 accident and a lap 180 restart, Earnhardt conversed with his pit crew over the radio. The owner of Dale Earnhardt's car, Richard Childress, describes one remark made by him during that time. "Richard, if they don't do something to these cars, it's gonna end up killing somebody." Dale has confirmed numerous times in the years since that he said the line and that he could see the possibility of a fatality when he saw that accident as well as his own later in the race. He first mentioned the quote after the death of Steve Park in 2002.

When the red flag was over, the race restarted on lap 180, with Dale Earnhardt Jr. in the lead. Marlin led the next three laps before Waltrip took over again.With less than two laps remaining, Darrell Waltrip in the Fox Sports booth commented that "Sterling [Marlin] ha[d] beat the front end off of that...that ole Dodge just trying to get around Dale [Earnhardt]." As the white flag waved for the final lap, both Earnhardt and his son Dale Earnhardt, Jr. were right behind Waltrip. Earnhardt Jr. was in second-place in front of his father. Heading into turn 3, Earnhardt, holding third-place, ran in the middle lane of the pack. Marlin, who was behind him on his left, ran in the inside one. R. Wallace drove his navy blue No. 2 Penske Racing Ford directly behind Earnhardt, and Schrader ran in the outside lane driving his yellow No. 36 Pontiac.

Going into Turn 4 on the last lap, Sterling Marlin was trying to pass Earnhardt, and hooked his car in the right rear panel, resulting in his car spinning in front of the whole field, and being hit by five different cars. The drivers that hit Dale were Sterling Marlin, Jeremy Mayfield, Rusty Wallace, Joe Nemechek and Ken Schrader. Dale's car ended up in the Turn 4 infield with extensive damage, including the whole front torn away, and almost no sheet metal left. Dale, having the wind knocked out of him, needed oxygen, but he was fine, as was everyone else involved.

Waltrip ended up winning the race, with Jr. finishing 2nd, Ricky Rudd in 3rd, Mike Wallace in 4th, and Bobby Hamilton in 5th. Dale, when asked in victory lane celebrating with Waltrip, said "Man, I'm glad he hooked me in the right, I felt the seat belts break the second I got hit the 5th time, If he had hit me in the left ... I may not be here talking to ya, and celebrating with my friend". Earnhardt Sr later spoke out against the lack of requiring the HANS device in NASCAR. "If I had hit that wall with how fast I was going, I probably would have been been hurt bad."

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