| Punches are the way to go, but they are expensive. Guessing $30 to $40 each.
Hole saws are the next bet.
Stainless work hardens which means that if you heat it up to much the steel changes to an impossible hard to cut alloy.
Thus it's important to keep the bit cool and use lubercation. Sort of a plunge/cool/plunge operation.
A small pilot hole will need to be drilled into the stainless. Cobolt bits are best. You can use an automatic center punch to mark the center and then drill with a 1/8" cobalt bit. The hard part will be keeping the bit from wandering. | 
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