An apparatus and method for automated loading of a drilling machine package having a plurality of drill bit receiving openings arranged in a known configuration with verified precision drill bits from a drill bit container is disclosed. The apparatus includes an automated transfer machine which is connected to a control device, a package frame, a container receiving member, and a diameter sensing device. While not necessarily connected to the automated transfer machine, the package frame and the container receiving member are located at positions which are accessible by the automated transfer machine. Further, the diameter sensing device is operably associated with the automated transfer machine. The method of operation includes the control device recalling data specific to a particular job. A drill bit container is placed on the container receiving member. The automated transfer machine removes a precision drill bit from the drill bit container and the diameter sensing device measures the diameter of the precision drill bit. The automated transfer machine delivers the precision drill bit to the package frame where it is loaded into a drill bit receiving opening in a stored drilling package.