Nelson (17-3-1) drew the tap at 4:17 of the second round. The finish came just moments after he split Oliveira's forehead with a beautiful elbow on the ground. Oliveira (20-6-1) wanted nothing to do with Nelson after that and gave up his back for the choke.
It was a much-needed result for the Icelandic welterweight, who missed most of 2018 because of a knee injury. Before Saturday, Nelson hadn't fought since August 2017. That bout ended in some controversy, as Nelson lost to Santiago Ponzinibbio via TKO after suffering an eye poke.
The 30-year-old was clearly in sync on Saturday, despite the time off. He took Oliveira down in the opening round but gave up a reversal moments later. Oliveira did land some ground pound from the top, but Nelson seemed relatively unfazed.
He went back to the takedown in the second round and moved quickly into mount after getting Oliveira to the mat.
Nelson has now won three of his past four bouts.
Santos crushes Manuwa in knockout win
There is officially new blood in the UFC's 205-pound division.
Former middleweight Thiago Santos (20-6) scored an incredible knockout against Jimi Manuwa (17-5) at 41 seconds of the second round, courtesy of a heavy left hook against the fence. It is Santos' second win at 205 pounds and his fourth in this calendar year alone.
It was a crazy fight start to finish, as Santos seemed determined to set a high pace. He threw 97 strikes in the first round alone, including a wild, spinning kick in which he launched his body into the air.
Manuwa, 38, held up well to several hard shots, but he could never turn the tide. He did appear to briefly stun Santos with a short left after pinning him against the fence, but Santos regrouped and went right back to the high pace.
"I came out to show I can hit hard, and I'm here to stay," Santos said.
Santos, of Rio de Janeiro, is now 4-1 in 2018. His only loss came via TKO against David Branch in April.
Nina Ansaroff scored the biggest win of her career, withstanding an early barrage to earn a unanimous decision over Claudia Gadelha, No. 4 in the ESPN strawweight rankings. Ansaroff (10-5) looked overwhelmed by the aggressiveness of Gadelha (16-4) at the start, but once she found her rhythm and range, she peppered the Brazilian with kicks, counterpunches and a steady diet of jabs to take control of the fight and win her fourth in a row.
Hakeem Dawodu won his second straight fight and looked dominant doing it -- at least to two of the judges. Dawodu (9-1-1) peppered Kyle Bochniak with punches and kicks for all three rounds of their featherweight bout and left him a bloody mess on the way to an odd split decision -- two official scorecards agreed with ESPN’s 30-27 tally, but the other judge had it 29-28 for Bochniak (8-4), who lost his second straight.
Gilbert Burns floored Olivier Aubin-Mercier twice with punches, wrestled him to the mat three times and controlled him on the canvas and nearly choked him out on the way to a clear decision win in a lightweight prelim. Both fighters came into the fight off losses, and Burns (15-3) got back on track with a dominant performance.
It's been decisions, decisions for Jessica Eye in the UFC of late. After losing four of them in a row, Eye (14-6, 1 NC) got the judges' nod for the third straight time, edging Katlyn Chookagian by split decision in their flyweight prelim. Chookagian (11-2) had won three in a row -- all decisions.
Elias Theodorou was rocked in the second round but worked to the final horn to earn a split-decision victory over Eryk Anders in a back-and-forth middleweight prelim. For Theodorou (16-2), it was his third win in a row and seventh straight fight to go to decision. Anders has lost three of his last four after starting his career 10-0.
Brad Katona kept things going in the same direction for both fighters, remaining unbeaten while handing Matthew Lopez his third straight loss in a bantamweight prelim. Katona (8-0), coming off winning The Ultimate Fighter this past summer, clamped on a choke in the final 10 seconds but the horn sounded before Lopez could tap, sending the bout to the scorecards. All three judges gave the fight to the 26-year-old Katona, two scoring it 29-28 and the other 30-27.
Dhiego Lima ended a three-fight losing streak in an explosive way, knocking out an aggressive Chad Laprise with a sweet left hook just 1:37 into their welterweight prelim. Lima (13-7) was a finalist on last year's season of The Ultimate Fighter, with the cast made up of fighters seeking a second run in the UFC.
Diego Ferreira was hurt to the body early in the first round but turned around the lightweight prelim by taking it to the mat and finished UFC newcomer Kyle Nelson with a ground-and-pound TKO at 1:23 of Round 2. Ferreira (14-2) has won three in a row.
Aleksandar Rakic overcame early trouble and floored Devin Clark with a spinning back fist counter to get the TKO at 4:05 of Round 1 in their light heavyweight bout opening UFC 231 in Toronto. It was the 11th straight win for Rakic (11-1), who absorbed several knees that appeared to be illegal, although the referee did not recognize the fouls. That left Rakic to fend for himself, which he did with a flashy finish.