A rotary cutting assembly (10) is provided for cutting a panel from an envelope blank or the like. The die holder (16) has an outer surface and a plurality of surface orifices (70) radially communicating with corresponding feed tubes (80) for supplying vacuum or air to the surface and into the vicinity of the envelope blank. The die holder may have an outer surface extending along the longitudinal axis for detachable receiving the leading end of the cutting die and a plurality of magnetic members (220) are disposed in the die holder surface for attracting the cutting die. A novel valve assembly (260) is provided for controlling the flow of air to the surface orifices.