Got the other side done today, no issues. The brakes feel great, even with already used pads and not being bedded in yet. The initial grab/bite is better.. basically it's easy to tell they simply have more leverage over the wheel/tire to haul down the speed of the vehicle.
Before:
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After:
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The various bits I used.
Teckis' modified step bit.
Bosch C2S2 5/8" countersink tool, about $11 on amazon.
Champion XSR "brute" step reamer. I paid about $60 for this online.
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The reason the cheap bit must be modified is we need the largest diameter to be 9/16", and these aren't readily available. Teckis is really clever and he chucked it up in a drill then spun it over a bench grinder to take off the larger diameter, and you have a cheap 9/16" step bit. This would work fine for most people if they have the tools to grind one down.
The countersink tool is used to debur and chamfer the holes after enlarging. Factory has a small chamfer around the holes, and it is good practice in through-holes like this.
The Champion bit is arguably overkill, but basically a more robust tool for this job. The longer steps do a marginally better job of stabilizing the bit (assuming you can put both hands on the drill), and a tool like this will most likely be made of better steel. Thing is, the knuckle isn't particularly hard metal, and most of this stuff will be used for exactly 4 holes for most people, so I don't see the cheap bit wearing out. But, no modifications, just chuck it up and go.
I used these in a standard dewalt 20v cordless drill. I often use the faster speed 2 for this type of job, and simply throttle the speed way down. I find that with less gear reduction if the bit grabs there is less inertia in the motor to dissipate into my wrists. These brushless drills are particularly good at stuff like this, and mine had zero issues.
Really.. each hole was less than a minute, if I could have both hands on the drill. You'll want to pay attention to keep the bit mostly straight, it is totally possible to get it crooked. I found looking around the back I was able to see the back of the hole that was larger than the protruding bit, and keep it straight by making the gap around the bit even.
For the two holes today I played with using a cutting lube, with no discernible benefit. I could see a situation where it could buy some buffer space for someone that isn't as experienced working metal and has more trouble walking the line of speed/pressure to keep the drill cutting correctly.. but for most it won't be important.
If you are changing backing plates which requires removing the hub and bearing, I recommend doing all drilling before that part, even though you'd technically have a little better access with the backing plate out of the way. With my drill everything cleared with it in place. Once you remove the bearing drill shavings can get inside the ABS tone ring cavity. If backing plate is left in place, do your drilling and chamfering, blow everything clean with compressed air, then remove the bearing to get at the backing plate.
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Chamfering the holes after drilling. To get access to the back you'll need to turn the steering, or if you have one (I did) use a right-angle drill adapter.
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The following clip is using teckis bit. Drilling one-handed made the tool much more shaky.. when I got rid of the phone things were nice and stable with good healthy chip production. Excuse the fan noises.. it has to be within 3 feet of me to keep the clouds of mosquitoes away.
This clip is drilling with the specialty bit. Less stable with one hand, but more stable with two. I actually ended up with this hole a bit crooked at half-way due to being distracted with the camera, but was able to rescue it before finishing.