We have developed a new phase referencing technique for high frequency VLBI observations. In conventional phase referencing, one interleaves short scans on a nearby phase calibrator between the target source observations. In fast frequency switching described here, one observes the target source continuously while switching rapidly between the target frequency and a lower reference frequency. We demonstrate that the technique allows phase calibration almost reaching the thermal noise limit and present the first detection of the AGN in the FR I radio galaxy NGC 4261 at 86 GHz. Although point-like, this is the weakest source ever detected with VLBI at this frequency.