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Associated Press
1/1/2007 4:53:52 PM

WASHINGTON (AP) - The Phoenix Coyotes are having fun again.

Owen Nolan had a goal and an assist in Phoenix's three-goal first period, and the Coyotes beat the struggling Washington Capitals 3-2 Monday for their third straight win.

The Coyotes improved to 16-20-2, the closest they've been to .500 since late October.

''We're playing hard, and it really was a nice effort,'' said Phoenix coach Wayne Gretzky. ''They're enjoying themselves.''

Phoenix struggled throughout the first part of the season, losing eight of its first 10 games, but has looked sharp lately. The Coyotes have won four of their last five.

''The last couple of weeks we've been playing really solid hockey, getting great goaltending, and everyone believes in each other right now,'' Nolan said. ''In the beginning of the season, we were really down in the dumps and whatnot and everyone wrote us off. But we've proven to ourselves that we can compete with really good teams and we're taking that into every game now.''

The Coyotes have really improved on the power play. Phoenix has six goals with an extra man in the last three games - it needed 11 games to score six before that.

Phoenix came into the game against Washington ranked 29th in the NHL on the power play but scored twice in five chances.

''Our power play and penalty kill hasn't been that great for us, and the last few games, it's starting to come on,'' said captain Shane Doan, who scored a power-play goal. ''When you win the specialty teams battle, it makes the game a lot easier.''

Mikael Tellqvist made 30 saves for Phoenix, which held the Capitals to one goal in seven power plays. Washington has lost five straight and seven of eight.

Both of Phoenix's power-play goals came in the first period and helped the Coyotes take a 3-1 lead after one.

Nolan gave Phoenix an early 1-0 lead with a power-play goal 2:02 into the game, but Brian Pothier's power-play goal tied it for Washington with 6:17 left in the period. It was the defenceman's first goal as a Capital and ended a streak of 51 games without a goal.

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