Much to Larry's chagrin, I use a drill press.
There are several issues with drill presses and drill bits. The biggest of which is dealing with a drill bit that skates around the top of your angled plane billet before wandering through a seemingly random and inaccurate progression. These issues are exaggerated with the thinnest drill bits (i.e. 1/8")
So, how do you make a 1/8" mortise with drill bits that are 1/8"? Here's how I make the mortise for a #1. (Again, this is a supplement to Larry Williams' Lie-Nielsen produced DVD.)
I start by marking the top of the mortise.
Mark the angle that the wedge will ultimately lean on the back of your stock. This line is drawn from the blind side of the top of the mortise to the blind side of the mouth.
Using a hand drill and drill bit that is 3/32" I make a pilot hole in the center of the marked mortise. (Use a nail set, awl, etc. if you are initially uncomfortable with making slight adjustments.)
Go ahead and make three more.
Once you are comfortable that the holes are centered in the mortise change the drill bit to 1/8". Widen the holes while approximating the angle.
These pilot holes, which are now 1/8", will prevent the thin bit from skipping around on the top of the plane billet when starting the holes.
Then it's on the the drill press.
This is our final goal from the drill press. There are four holes up top. Usually you will only get 2 or 3 on the bottom.
I take the time to make four holes because the mortise chisel is then two strikes of a mallet away from being through.
I was off by 1/128".
Any time I use the 1/8" bit I make more than two holes. I make four for the 1s and 2s because the mortise is only 1/8". I make three pilot holes with 3-6. With those planes, after the drill press, I use a 9/64" or 5/32" bit in my hand drill to widen the holes.
The process seems like there are a ton of steps. The whole process--from starting the pilot holes to walking away from the drill press--will take me 5-7 minutes for a pair of planes.
Additionally, I only make these pilot holes when using a 1/8" bit. I always, always, always mark the angle of the leaning wedge on the back of the billet to make certain the jig is correctly aligned. It's quick.