steelswing....
if this is your first knife, you might be better off getting a kit knife,,,,then you can learn how things work .
Now as for 5160 steel, that type of steel is just used a lot in car leaf springs...they are found everywhere.
The saw blade steel is way to hard yet to try to drill....they make it that hard so that the saw blade will not bend.
thats fine for cutting stuff, but you wish to drill in it and thats just never going to work.
I cant tell you what to do.
But I can tell you what I would do.
First you have to get the saw blade down to a size you can work with. I like to use my power saw with a steel cutting blade on it. it will cut the fastest and a steel cutting blade lasts a long time so you are money ahead.
after you get the blade cut to a size workable, you would need to anneal the steel.
That means heating the steel until it's red hot. and to do this you need a forge. Now I have made many little coal forges, they are easy to make just a bunch of pipe, a flat place with a hole for the pipe to stick in, and a shop vac or a hair blowdryer. and reg charcoal.
once you get the steel red,red hot , you let it cool very slowly..burry in ash, or something to keep it warm.
this will make the steel soft enough to drill and file