Re: Where to Find Tool Holders and Micro Drills
A quality ER holder would be my choice for that. That's what we use in our TM-2P for most hole drilling and tapping.
0.040 dia by 5x deep might be a bit of a challenge, especially in 304. We use both carbide and cobalt, but normally cobalt in the smaller sizes. I would use a micro-drill style, much stiffer than a jobber style. I think you will need to peck to clear chips, but this a bit of a problem in 304 because it likes to work harden. You might talk to your local tool vendor about drill bit options. We normally buy from Western Tool & Supply https://www.westtool.com/ and they are pretty helpful when to comes to stuff like this.
You can't do much better than Guhring for quality.
https://www.westtool.com/catalogue/product/497540
Jim Dawson
Sandy, Oregon, USA