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What size bit should i use for 1/8 inch diameter handle pins. I am not sure what the best size is. Would 3/32 inch work?
How could you possibly think a 3/32" hole would work for a 1/8" pin?
Download that
http://www.brokenbolt.com/images/starrett-inch-metric-tap-drill.pdf
You want to make it a hair larger
By definition that's about .002 or .003"
First you have to determine the size of your eighth inch pin material
You don't know if it's .120 or .130 or anywhere in between
Start with this, it's really handy
http://www.use-enco.com/CGI/INSRIT?PMAKA=890-9373
https://www.grizzly.com/products/G9256
Stay away from the cheap digital ones, you will go broke in batteries, Mitutoyo is good, but they are not cheap
Then pick a drill from your # drill index that's larger
http://www.use-enco.com/CGI/INSRIT?PMAKA=337-2193