There are two forms of tone hole manufacture. i.e. Drawn and Soldered. The former is on all student instruments, mid range instruments and some hand made instruments The latter is used just about almost exclusively in hand made flutes.
Drawn holes are crafted by a tool which pulls the main body tubing up in a cylinder at right angles. This is then trimmed and then the sharp edge is rolled back on itself to create the top of the tone hole, upon which the key pad will create the air seal for that note.
Soldered tone holes are actually produced from a separate tube of material. The maker cuts the tube into rings and then shapes one side to fit the curve of the body tubing and makes the other side flat. The flute maker then cuts holes in the main body tube and solders this ring to the tube. The advantages of soldered over drawn holes are that the soldered tone holes don’t cause thinning of the body tubing, are flatter on top and, therefore, make a better seal for padding. However, in practice it is difficult to say whether these advantages really have enough effect to base a purchasing decision on them.