A vertical-edge double-step sawtooth cutter for preparing high-quality holes of composite material and thereof hybrid stack structure, and has three parts which are a major cutting edge region A, a minor cutting edge region B and a shank region C. The minor cutting edge region B comprises a step vertical-edge region D and a sawtooth cutting region E. This has the step structure and the sawtooth structure which is distributed in the first step, has a recutting function at the inlet and a reverse cutting function at the outlet in the direction opposite to the main cutting motion. The cutter has the vertical edge structure distributed in the second step, and the angle of the second step is a negative value, thereby realizing chip breaking and crushing, reducing scratch to the upper-layer composite material and metal hole walls.