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A counterbore is a cylindrical flat-bottomed hole that enlarges another coaxial hole, or the tool used to create that feature. A counterbore hole is typically used when a fastener, such as a socket head cap screw, is required to sit flush with or below the level of a workpiece's surface.
As mentioned above, the cutters that produce counterbores are often also called counterbores; sometimes, to avoid ambiguity, the term counterbore cutter is used instead.