He played college football for the Stanford Cardinals, earning second-team All-American honors in 1978.
He accepted a football scholarship from Stanford University to play under head coach Bill Walsh.
In his first year at Stanford in 1977, he was named the starter and became the first freshman running back in conference history to rush for more than 1,000 yards in a season.
Nelson was a dual threat as a rusher and receiver, becoming the first player in NCAA history to rush for more than 1,000 yards and catch more than 50 passes in one season.
As a rookie, he experienced a strike-shortened season that was reduced to 9 games, finishing second on the team to Ted Brown with 136 rushing yards.
As a running back, Nelson was a threat as both a runner and as receiver out of the backfield, though he is perhaps best known for dropping the game-tying touchdown on 4th down in the closing moments of the 1987 NFC Championship Game.
He was a backup running back behind Herschel Walker and Terry Allen and was also the team's kickoff returner for two seasons.