It gets even more complicated. You can buy the counterbore tool with two or three different pilot diameters. Look up what the standard clearance is for a #4-40 fastener, then make sure that you buy a counterbore tool with a pilot that fits that hole. I didn't know about this, and two of the counterbore tools I bought had oversize pilots on them. Since the pilot doesn't do any actual cutting, I was able to mount my heavy duty air die-grinder on the toolpost of my lathe and turn the pilot down to the correct size. If you do like petertha suggests and just plunge with an unpiloted endmill, it will pull itself off center and the counterbore will not be concentric with the bolt hole. Do a web search for cap screw counterbore tool---I just did and there are a dozen different suppliers.