Drilling is the source of major cost and time elements in airframe assembly due to hole quality, burr formation, and tool life problems plaguing the industry. Aerospace applications focus on holes for rivets loaded in shear in aluminum, titanium and composite stack-ups. Optimal chip flow and tool life are often in competition with burr formation, general hole quality, and cycle time. Physics-based modeling of drilling processes can provide insight and information not readily available or easily obtained from experiments, and in a much faster time frame. A three-dimensional finite element-based model of drilling is presented which includes fully adaptive unstructured meshing, tight thermo-mechanical coupling, deformable tool-chip-workpiece contact, interfacial heat transfer across the tool-chip boundary, and constitutive models appropriate for high strain-rate, large strain and high temperature deformation.