A modified roofing nail is perhaps the most versatile tool for removing core when sealing fastener holes. It is much easier to control than bent nails or cut-down allen keys, which can jump around as they spin. Core removal is more uniform. Wood chips are finer and easier to remove. It is faster than a Dremel cutter and undercuts twice as far.
Fabrication is easy. Clamp a nail in a vice, slot the head into quarters with a hacksaw or Dremel wheel, and bend the tabs in alternating directions. Each nail is good for many, many holes. Make several if you like, from different size nails, but we like roofing nails.
How well does this work on plywood cores?