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When I cut a round hole in my mill it comes out oval. I have checked calibration of x and Y and they are 100% correct.what more can I do. I am cutting 2mm wood so there is not much side load.

It's almost certainly backlash or simple lost steps assuming steppers. If you are calibrated as you say, those are the only other options.

I recently had a similar issue on my cnc. Measuring round features in X and Y directions was reasonably accurate, but measuring on a 45deg angle to these found large errors.

The problem was that my gantry (x and Y axis) was not square anymore. After squaring it up the round features were within +-0.01mm (50mm diameter).