On the Tormach, is there any reason to use the chuck to hold a drill bit if there’s a collet of the appropriate size?
Nope. I use 5/16, 3/8 and 1/2 drills in ER20 collets directly all the time.
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Another reason I use collets is that I can’t find a key for the small chuck and I often use more than one drill size. Any idea where the key is?