Dowel peg holes are often found on the inside of cabinets to allow for adjustable shelves. By drilling holes directly into the wood that the cabinet is made of, the need for attached metal shelf hook strips is eliminated. Once the trick of how to align dowel holes is solved, other projects that use this useful trick will become obvious, such as finally creating the thread holder you have always wanted.
Lay the piece of scrap wood with the 2-inch side down. Use your speed square and pencil to draw a line down the center of the wood. Determine how far apart you want your dowel holes and mark the line in two places to indicate those holes.
Place your scrap wood in your drill press and adjust the guide so that you can drill the two holes exactly on the line.
Insert a 1-inch dowel into the scrap would so that it exits the bottom of the scrap by 1/4 inch. Use carpenter's glue to glue the dowel in place.
Lay your project board flat. Measure 2 inches from the top and bottom and mark. Measure 1 1/2 inches from each side and mark. Draw straight lines through these points using a speed square and straight edge.
Calculate 1/2 inch (the depth of the scrap) plus one half to two-thirds the depth of the project board to set the depth on your drill press. If you are using a 1/2-inch board, then your peg hole depth should be 1/4 to 3/8 inch deep. Your drill press will need to go through your scrap and into your project board so add your depths together.
Align your project to the drill press guide so that the long side of the project board is against the guide. The drill should be centered exactly over the long pencil line. Where the long pencil line and short pencil line cross drill a hole that is 1/4 to 3/8 inch deep.
Place the peg that is protruding from your scrap wood into this hole and use your pre-drilled hole as a guide for each additional hole. Repeat this process for the other side of the project board.