1/8" Reamer with #31 drill bit
Straight 3 flute reamer includes a drill bit that is just under sized for the desired hole. Drill the hole with the undersized drill bit and then ream it out to the proper size. Go slow with the reamer and make sure to use cutting oil for a smoother, more round hole. Using a reamer is a must for precision quality in folders. Also, make sure your drill table is square to your quill or you will never get a nice round hole no matter how good the reamer is.
TIP Check to see your drill table is square by inserting a Z shaped bent wire hanger into the drill chuck. Set/bend the wire so one end just barely touches the table and then rotate the chuck by hand. The the wire should scrap evenly all around the table. If it doesn't adjust the table angle until you get as near perfect as you can. Consider upgrading to a key less chuck on your drill press. Even the cheap ones are usually better than the drill chuck that came with your drill press and once you use a key less chuck, you will wonder how you got along with out it.
Midwest Knifemakers Supply, LLC