I am looking to get a magnet that is about the site of a CD and has a hole in the middle. I was unable to find one with a hole but I found a solid disc that would work. My question is, can I safely drill a hole in the middle of this magnet without severely compromising the magnetic force? The magnet I am talking about is a industrial strength rare earth magnet.

Below are the specs from the website selling the magnet

Rare-Earth Neodymium-Iron-Boron Magnet; Shape - Disc; Dimension - Diameter 1.000" (25.40mm) x Thickness 0.125" (3.18mm); Material - Sintered NdFeB; Magnetization - Magnetized; Magnetization Direction - Thickness; Plating - Nickel; Temperature Range (Deg C) - 0 to 80; Dimensional Tolerance - (+/-0.005"); Grade N40; Pull Force - 10.69lb/4849g

Besides a slight decrease of magnetism there will be no other problems, but getting out the filings. A magnetic field is resulting from the entire force delivered by aligned magnets all through the magnet body from surface to surface.
In the early 1970's I did research in many types of magnets, but never experienced problems as you seem to expect.

Success !

:)