[Universal Exports]

I'm a super beginner at woodworking, but I'm trying to make an e-cigarette holder for a friend. Seemed like it would be easy enough, but I realized I don't know how to make holes in wood... do I have to have a drill with a big circular drill bit to make big holes? If so could someone direct me to a particular drill bit I might want to buy? Or is there another way? Thanks!

http://ecx.images-amazon.com/images/I/31d+S-OAtyL.jpg

I want to end up with something more or less like that.

 

[Alchymist]

http://www.mlcswoodworking.com/shopsite_sc/store/html/smarthtml/pages/forsbit.htm