The Australian national champion stole the show on the second day in Germany, setting a new personal best in the ladies' short to take the lead ahead of Saturday's free skate.
Her score of 58.02 points was enough to take her beyond Matilda Algotsson of Sweden, she too registering a personal record with a tally of 56.91.
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German home favourite Nathalie Weinzierl also took her place on the podium in the Olympic qualifying event, sitting in third in her bid to go to PyeongChang.
Craine said: "Of course, I was nervous, because it's an Olympic spot, my dream on the line, but I definitely prepared.
I couldn't have done anything else in training to prepare for this moment. I've been really present in my training and I tried to mimic competition in my training.
Meanwhile, North Korean figure skaters have assured themselves of a place in South Korea after Ryom Tae-ok and Kim Ju-sik finished sixth in the pairs programme.
The pair had sat fifth after Thursday's short programme, with a free skate sixth-place effort enough for them to guarantee an Olympic Winter Games berth.
The winners of the Nebelhorn Trophy, Evgenia Tarasova and Vladimir Morozov of Russia, had already secured their spot thanks to their performance at the ISU World Figure Skating Championships 2017.
The world bronze medallists scored 140.94 points and totalled 218.46 points to win the event, with Morozov threatening an improved performance still to come.
"It was not 100 per cent yet, but it was our first competetion. It was a good way for us to start the season like this in Oberstdorf," he said.