There are dozens of ways to drill dog holes that dead-nuts plumb, and I’ve written about many of them during the last 17 years. My favorites use the fewest tools and jiggery – not everyone has a big plunge router with massive bits or can clamp a drill press to the benchtop.
This method uses a 2×4, a drill and a bit.
First you need to drill a plumb hole through the width of the 2×4. If you don’t have a drill press, here’s how: Mark a centerline on both long edges of your 2×4. Mark the location for the entrance and exit hole on the 2×4. These marks should be aligned. Drill through the 2×4. If your entrance and exit holes both hit the mark, the hole is plumb.
Now clamp the 2×4 on edge to your benchtop and use the plumb holes as an oversized doweling jig to guide your auger bit. The length of the 2×4 will allow you to put holes anywhere you please on a benchtop.
Oh, and why should the holes in your benchtop be plumb? Everything works better. Your holdfasts will hold consistently. Your dogs will grip the work more tenaciously.
— Christopher Schwarz