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Generically -- die holders are to keep the alignment of a die straight while it is advanced to cut outside threads. One common machinist application is to put threads onto a short piece of metal where cutting threads with a lathe is not practical.

Most penturing dies are used to cut external threads in the feed/cap area of a pen being made without the benefit of pre-manufactured components.

Die holders are much more stable on a metal lathe or an adapted wood lathe than alternatives like a hand die holder and provide a more consistent outcome (and a much shorter learning curve). Much better with delicate fragile materials like acrylics unless you want to invest in a higher loss rate and more swearing.
 
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