How a mortiser drills square holes
Yes, you can drill a square hole with a round bit. Here's how: An auger-type drill bit spins inside a hollow four-sided chisel secured to the mortiser. The bit itself locks into a drill chuck inside the head of the machine. When you pull down on the mortiser's feed lever, the bit and chisel plunge simultaneously into your workpiece.
Like all drill bits, the auger bit bores a hole and ejects the chips. Meanwhile, the four sharp edges of the chisel pare the wood around the bored hole into a square shape. The auger bit removes this waste, as well, through a chip ejection slot in the chisel.