Another poster reported success in drilling the unthreaded holes in a cheap 1-2-3 block out to allow a 3/8 inch stud to pass through, so I decided to try it.
Clamped the victim block to the drill press table and drilled it with a Rodman (made in Germany) 3/8 carbide-tipped bit, using low speed (500 rpm) and lots of water-based coolant.
It squealed a lot, but drilled quite well, leaving a pretty clean hole, yielding lots of little chips and no long curly chips. The problem came when I got half-way through, drilling into the cross-hole. The interrupted cut broke the carbide wings off the drill bit piece by piece. Things got a lot noisier, but I was still able to complete the hole, and a 3/8 stud now passes through.
I was able to drill a second good hole with that bit, but that's probably it. Though I bet it would still drill, but might not make the full diameter needed.
So, I tried some cheap Vermin America masonry bits. Couldn't get through one hole, never mind two holes. It took two VA bits to make a usable hole, and totally mangled both VA bits.
It seems that Rodman uses far better materials than VA. What a surprise.
Joe Gwinn