We demonstrate enhancements of performance and energy efficiency of cutting tools by deposition of diamond-like carbon (DLC) coatings on machine parts. DLC was deposited on steel drill bits, using plasma enhanced chemical vapour deposition (PECVD) with the acetylene precursor diluted with argon, to produce a surface with low friction and low wear rate. Drill bit performance in dry drilling of aluminium was quantified by analysis of power consumption and swarf flow. Optimised deposition conditions produced drill bits with greatly enhanced performance over uncoated drill bits, showing a 25% reduction in swarf clogging, a 36% reduction in power consumption and a greater than five-fold increase in lifetime. Surface analysis with scanning electron microscopy shows that DLC coated drills exhibit much lower aluminium build up on the trailing shank of the drill, enhancing the anti-adhering properties of the drill and reducing heat generation during operation, resulting in the observed improvements in efficiency. Variation of drilling efficiency with argon dilution of precursor is related to changes in the microstructure of the DLC coating.