Kittyhawk - you can do that - its called treppanning - using a narrow cutting tool in the boring head - normally 2 or 3mm wide - with a slight angle on it so it cuts off the larger diameter first (at which point the disk you have cut out starts to spin - stop).
Of course if its the disk you are after producing then you want the angle the other way.
Just clamp it down onto something sacrificial - like MDF board.
If its the disk you are after or are concerned about what it will do on breakthrough - stick the plate to your sacrifical (MDF) with double sided tape. (superglue - whatever.)
You also get cheapo trepanning tools that revolve around a predrilled pilot hole - I have one and it works surprisingly well - but accuracy will not be as good as with a boring head.
With a boring head - set it to a scribed line - aiming to be slightly undersize - take a small cut - measure and adjust.
Ken