Paul –
Cutting radius.
It’s worth marking out the material first as a guide.
You see on Dave’s photograph above, the small dial with a central hole – that hole is a hexagon socket for a standard Allen key.
This is the feed dial, in either inch or metric increments, for moving the cutter inwards or outwards. It does not tell you the radius of the hole, only the change in radius you set; analogously to the cross-slide dial on a lathe.
There should also be a locking-screw on the side, probably on the opposite side in the illustration, to hold the slide rigid for each cut.
Take an initial cut to bring the starting drilled or hole-sawn hole to an accurate circular shape and smooth finish, then measure its bore. Then you calculate the radius difference, and use that in conjunction with the dial as on any machine feed-screw.
Bear in mind measuring an internal diameter accurately is not as easy as an external one, with ordinary calipers, and the finishing spring-cuts Dave advises may take the diameter beyond what you think you have set. So you need creep up on the finished diameter very carefully.
For the axial feed, use the milling-machine’s vertical feed-screw, not the quill, for better results.
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I mentioned “inwards or outwards”. That is because you can, by turning the tool itself round in the holder, also use boring-heads for cutting external diameters such as locating-bosses.