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Quality annular cutters, properly held, will make a very accurate hole. No need to start with 1-7/8 and bore unless you need a tolerance measured in single-digit thousandths. Hand-held drill, no. Gooddrill press or mill, yes.
I guess it would depend on the size holes with step drilling, or did you mean using a
step drill on thin materials ?
Annular cutters give you round very clean accurately sized holes, quickly but at a price.
Just had to do some light deburring of the sharp edge on that prop elevator call button
panel I posted previously.
The baby versions of them are Blair Rotabroach, excellent for sheet metal.
The kerf on the annular cutters are pretty big, random measuring of the few I have
are about .1940" so if you have tubes that have that wall thickness it's a perfect match.
if your tube wall is thicker than that you could use an annular cutter to save time by roughing with an annular cutter and finishing with an end mill. That's a rather esoteric application, though. I can't think of any reason to design such a feature, other than to make machinists hate you.