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That is correct that making holes with a vertical plunge and 0.25" peck depths will likely cause excessive heat and burning…
Instead you could use a 1/8" compression (or downcut) bit and cut 1/4" circle shapes with pocket cut type.
The settings you have would be fine for cuts other than pockets… i would use a higher rpm even…
Are you drilling ¼" holes with a ¼" compression bit? If so, I would expect burning. I would not recommend drilling with anything but a drill or an upcut endmill made for center cutting.
The compression bit will force chips to stay in the hole, which you rub and burn.
Thanks @NeilFerreri1 . The drill is making the bottom veneer layer tear. I was hoping to get it done without a bit change. Do you have recommendation on an upcut enddmill made for center cutting which will not make it burn?