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Yes, small holes are a major problem. Look at it from this perspctive, if you put a 1/4 inch drill bit into a chuck and bent the tip of the drill 1/8 inches from the chuck then proceeded to drill, it would probably break the drill bit. With a #80 drill bit, .006 inches (about the width of a hair) would have the same effect. The equipment you are using is not particularily suited for this task.
If you have a collet chuck that can hold the #80 bit, take one of the broken ends and secure it in the collet so only a small amount of the drill tip sticks out from the collet. If it will turn true, this will stiffen the drill bit. Next, hook up a router speed control to your Dremel and slow it way down (for steel). Try and drill the hole with the shorter bit end and let me know what happens. Don’t forget to use oil. Also, make sure the tool is not running in reverse.