The die grinder performs very good, its very strong for its size. Speeds from 1-3 one can notice that the speed tends to fluctuate a bit but no crazy fluctuation to mess up on what your working on and I believe this happens because the tool uses frequency regulator to adjust the speed. Overall I'm happy with the tool and yes the 1/8" collet can be used but you might have to fight later on removing the 1/8" collet away from the 1/4" collet because it creates a tight grip. My opinion yes you can use 1/8" bits but steer away because this tool will overpower your bits no doubt.
I also bought their corded rotary tool trough Amazon and it performs like a champ, shame I cannot leave review for it here. Keep it up Vevor, nice tools for a nice price, thank you.
WJB 
