The jaws on a chuck move out from the body of the chuck. As the jaws start to grab the tool, it will carry the tool slightly as well. A collet with a tapered body will be drawn slightly in as the collet is tightened. It would be OK to use your method for non critical work but I wouldn't expect to set to a thousandth.Thanks for the suggestions. I wonder if the following would work: For chucks or collets, what if I leave the drill bits or end mills in them loosely, lower the z-axis until the tool is resting on top of the work piece, tighten my z-axis and then tightened the chuck or collet?