I do mine on the mill, while I still have tube blocks attached from cutting the bottom bracket miter. I do a 1/4" hole 35mm from the top of the seat tube and a 3/16" slot, leaving it connected at the top until after reaming. After the frame is completed and the seat tube reamed, I cut the top section with a cutoff wheel and finish it with a file. I used to do an 1/8" slot, but I broke too many end mills cutting them and the larger slot doesn't hurt anything.