Michie, ranked No 81 in the world, scored an upset with his 5-3 victory and now plays Steve Davis or John Parrott today for a place in the last four.
"My wife, Tracey, had a dream before I came down here that I was going to win the tournament," said the delighted Yorkshireman. "Normally I don't believe in those sort of things but I've had it at the back of my mind since I arrived in Plymouth. I certainly could do some damage to a lot of players if I repeat that kind of performance."
Michie's reward is a match against the 1991 world champion John Parrott after the Liverpudlian defeated Steve Davis 5-4 in a match he could quite easily have lost, missing a vital brown in the last frame after fighting his way back.
Michie, meanwhile, will be playing in only his second ranking tournament quarter-final and his first since losing 5-4 to Joe Swail at the Grand Prix in 1994. "This is my last event of the season because I haven't qualified for the world championship," added Michie. "So I want to make the most of it. I'm trying to get back in the top 64 for next season and the money will come in handy."
He is certainly a lot happier than this time last year when he was embroiled in allegations of match-fixing after losing to Mark Gray in the opening round. The case against him was never proven and he stressed: "I thought about last year a little bit. But I had nothing to do with it so as far as I'm concerned it's all in the past."
O'Sullivan managed to share the first six frames but was undone in the seventh by a starting break of 56, prompted by a brilliant opening red.
Michie, a 150-1 outsider before the tournament, scrapped his way to victory in the eighth to complete his unlikely win.Reuse content