The incident forced the university to issue an alert, locking down the campus as officers with rifles stood guard.
The man has been identified 31-year-old Jesse Kister. He was captured in the 300 block of East Franklin Street.
Saturday night, sophomore Peter Diaz says he and a friend encountered Kister at a restaurant on Franklin Street. Diaz said Kister was carrying a switchblade.
"My best way to describe it is like a rabid animal," said Diaz. "He looked like he was possessed or really angry about something, but he wasn't really able to completely express it. "
It wasn't until Diaz saw video of the suspect that he contacted police. He recognized Kister but decided against seeking criminal charges.
"I don't feel like I have anything to gain by pressing charges as long as he's in a situation where he's no longer on the street doing that thing to random people because it's very scary," said Diaz.
UNC police say Kister is in the hospital undergoing an evaluation.
When he's released, he'll be formally charged with assault with a deadly weapon, communicating threats and for having at least four knives on campus.
In his online professional profile, Kister says he earned three degrees from UNC focused on healthcare administration, and information technology. He also recently launched his own consulting company.
A former colleague, who was shocked to learn about the allegations against Kister, described him as highly intelligent, and brilliant.
Monday, Chapel Hill police were staked outside Kister's Chapel Hill apartment, trying to figure out what made the former student turned businessman snap.