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weldless spigot

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You'll need a step bit, like this. http://www.lowes.com/SearchCatalogDisplay?storeId=10151&langId=-1&catalogId=10051&N=0&newSearch=true&Ntt=step+bit&x=31&y=15

You might be able to get a cheaper one at harbor freight, but you get what you pay for. Drilling the hole is so much easier with a quality bit. Plenty of pressure, slow drill speed, and liberal amounts of cutting oil. Too fast and you'll overheat the metal and it will harden and ruin your bit. Good luck. It's pretty easy. Oh yeah, drill a small pilot hole before using the step bit.
 
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