I purchased the diamond tip turning bit from McMaster that Tim found.
I will be here today. I'll give it another try. I am using lots of
coolant. The tool and magnet never even get warm. As far as the dust.
I would imagine the magnet would keep it down, as long as the coolant.
But I will be more cautious of it.

Randy, not quite sure how I would use a diamond griding wheel on my
lathe to turn down the diameter. I need to be accurate to a couple of
thousands.

I tried machining some of those AlNiCo magnets last week. I think they
were the AlNiCo 8 ones which had around 5% cobalt in them. That was a
challenge. I wore out a solid cobalt drill bit, which barely put a
dent in the magnet and a 3/16" solid carbide endmill which rounded the
corners off only after a coulpe of passes.

As most can probably tell by now, I am pretty new to machining these
things. But I am sure learning alot!

Thanks.