The types of mods you want to perform will dictate the types of tools you will need.
You wouldn't want to go out and buy a bunch of tools if you don't really need them, especially if you are on a limited budget.
Also, there is often more than one way to perform a mod, and more than one tool that can get the job done. Power tools can get the job done fast, but they will be more expensive. Hand tools can get the job done, and will take longer, but they tend to be a lot less expensive.
Here's an example- Let's say you wanted to grind some grooves in a handle scale to increase grip. You could buy a dremel, a sanding drum, and some sanding bands. Or, you could go a cheaper route, buy a round file, and do it by hand.
Also, I've used a dremel with abrasive wheels to refinish blades, but the same job can be done by hand using sandpaper.
Here's a suggestion- If you are going to be removing screws from knives there is a chance you might encounter some stubborn Loctite (specifically red Loctite). Get yourself a good soldering iron to heat the screws and loosen the Loctite so you won't damage the screws. For stubborn Loctited screws, just stick the tip of the soldering iron into the head of the screw, heat it a little, then try to turn the screw with a driver. Repeat the process, and use increasing amounts of heat until you are successful. Be careful not to damage the handle scales by applying too much heat. Never try to force a screw out. If a screw cannot be turned using light to moderate effort, then it's probably firmly glued in place with Loctite and will require heat.
And I second the recommendation of Wiha drivers and bits. But there are less expensive ones that will work fine (like Husky brand from Home Depot).
