Well it's time to get back on subject here.
After drilling the hole large enough a boring bar is used to bore out the hole. I'm going to make the hole 1.125" (28.57mm) in diameter. I was shooting for 1.000" (25.4mm) but went over. You don't want to make it to big because you won't have a place to put the set (grub) screws. I check how close I was with a digital caliber. These are not good for getting the bore right on size.

Here's why the calibers don't work very good for inside measuring. The blades on the end have a square surface. Although small you really can't get to the point at the which it should be measured. Here's a C-o-C of what I mean.
The points of the blades will touch the sides of the wall at "A" and "B", but not at "C" because of the small flat of the blades.

So in order to get a proper sized hole I made a plug. There are two diameters on it. It's kind of hard to see but the first dia. is .005" (.127mm) smaller than 1.125".

So I use the calibers until I get close to a bore of about 1.125" (28.57mm). When I'm close I use the plug gage.

Now in order to get that last few thousands or tens of thousands I use the top slide to put on a fine cut.
How's that done you ask? I set the top slide over to about 11 degrees from the parallel to the center line of the lathe. This gives a ratio of 5 to 1. In other words when I move the top slide .005" (.127mm) it will move the tip of the cutter .001" (.025mm). So I can put on a very fine cut to the point of being able to move the top slide .001" and move the tip of the cutter .0002" (.005mm). A nice way to be able to put on a real fine cut using a manual machine without a DRO.
Here's a pic of the set up. Although not much to see, you'll notice how far I've moved the top slide toward the lathe center line.

And the end result is that I get the gage to fit with a couple of very light cuts.

Next I had to make a plug that will eventually have a hole through the center to hold the cutter. The hole can be almost any size. I need one with a .500" (12.7mm) hole for the shank size of the cutter I'm going to make. Again note the angle to of the top slide. I moved it over to 10 degree to give about the same ratio as I did on the holder.

And here are the completed parts for the tool holder.

That's it for now. I need to get some set screws, grub screws for you foreigners, and drill some holes. Until next time.
Regards,
Bernd