Hvala, who is yet to finish on the World Cup podium individually let alone win, stormed into the lead after producing by far the biggest jump of the first round, 141m, for an overall total of 140.8 points.
That effort was over eight points better than Freund's in second, however, the pressure appeared to get to the 19-year-old Slovenian as he was the last to jump in the second round in Finland.
By then Freund had set the bar high recording the equal best leap of the second round, 135.5m, to overtake Russian Dimitry Vassiliev in the lead with his combined total 266.1 points.
But Hvala couldn't respond and managed an effort of just 97m and 53.7 points which gave him a below par overall total of 194.5 ranking him well down the field in 24th.
That left Freund celebrating his second win from the three events so far this season while Vassiliev took the runners-up spot just behind the German with a total of 265.4.
Freund and Vassiliev were well clear of the rest of the field with Simon Ammann edging out Gregor Schlierenzauer and teenager Andreas Wellinger for third with 255.7 points.
And, even before the late drama involving Hvala, there was a shock as World Cup leader Thomas Morgenstern didn't even qualify for the second round after a below par first jump.
- Sports & Recreation
- Dimitry Vassiliev