Thanks everyone, I used a punch and hammer like indiana trials and just used my 1/2" bit, It has a smaller bit on the tip to make a pilot hole. I spent a good 3 hours working on it so I probably wont drill them bigger. If I had the choice I'd do it before the rim was laced to a hub so I could use a drill press or drill them from the inside out for a cleaner hole on the outside. I agree you shouldn't go too close to the side walls but I think I could go another 6-8mm and be safe. Its a fun project if you want to improve your bike without spending anything, and it gives it that nice trialsy look.