A carbide cutter in a Dremel-type tool would probably hog it out, if you don't care about it being exactly round.
Carbide is the way to go unless you want to use more expensive diamond abrasives. Semi high speed, slow feed, plenty of cutting fluid, and rigidity is needed. You can get by with a high speed hand drill if your extremely steady though..but I wouldn't recommend it as just a slight movement can potentially break them.