 Palace Music remained in the United States, Allen E. Paulson acquired an interest in Palace Music from Bruce McNall.Turned over to American Hall of Fame trainer Charlie Whittingham, in 1986 the then five-year-old Palace Music won three stakes races on turf in California and came from fifteen lengths back to finish second by a head to Last Tycoon in the November 1, 1986 Breeders' Cup Mile hosted by Santa Anita Park in California.Shipped east to Maryland, two weeks later Palace Music finished third to long-shot winner Lieuenant's Lark in the Washington, D.C. International Stakes at Laurel Park Racecourse.