The first time Draco saw Hermione, he thought she was the most beautiful girl he had ever seen, but he didn't want to tell her because she hung out with people like Potter and *gag* Weasley. He knew she would not like him the way he loved her.
During their sixth year, Harry had fallen for Ginny, and Ron started dating Lavender Brown. This meant that Hermione was finally free to date. He wanted to tell her how he felt. When he finally got enough courage, he found her in the hospital wing next to passed-out Ron. He watched in the shadows for several minutes. During that time, Lavender stormed out of there, and he saw Hermione holding Ron's hand. At that moment, he decided not to say anything. Looking at her and Ron, Draco saw that Hermione was more happy than she had ever been, and that was what he wanted more than anything in the world.