Top seed Molik, ranked 130th, came from a set down to overpower Alison Bai in group play 3-6, 6-3, 6-1. Dokic, a Wimbledon semi-finalist a decade ago and a former world number four, defeated Tammi Patterson 7-5, 2-6, 6-3 in hot-house conditions at Melbourne Park.
Dokic and Molik have split their two meetings on the WTA - but the last of their clashes occurred in 2003 in Miami.
"We have not played for many years now and we have always had a healthy rivalry," said Molik.
"You go through so many emotions in your career and a lot of hurdles, but we have both been able to overcome a lot."
"She is as desperate and as eager as I am so I think it will be a really interesting match. Sometimes it is nice to have that pressure on, where you have to produce a result. My goal now is to be there Sunday (in the playoff final)."
The event for men and women awards a wildcard entry into the Australian Open for winners on the men's and women's side. Friday is a rest day.
Dokic was pushed to three sets by Patterson but swept three of the last four games to move through the group stage and into knockout competition Saturday.
"We go back a long way so we know each other very well. I need to be ready mentally for a very tough match. I need to lift my game," said Dokic, who parlayed a wild card two years ago into a run for the last eight at the Open."
On the men's side, top seed Peter Luczak will face Matthew Ebden in a semi-final re-match of the bronze medal play-off at the 2010 Commonwealth Games. Number 137 Luczak booked his place over James Lemke in the quarter-finals, 6-3, 7-6 (7-5).
Luczak is psyched about his chances of finally making an impression at his home Grand Slam from January 17 onwards after a first-round loss in 2010. He has twice been to the third round at the major.
"If you win three or four matches here you feel on top of the world, especially if you have earned your wildcard," said the 31-year-old.