I have posted these instructions a while ago on SCI. Here it goes:
While a slot car comm lathe still goes for over $100, you can get a RC lathe really cheap as RC racers are using brushless motors and no longer need the lathe. As I'm writing this I checked ebay and there's one going for $19.99 with one hour to finish.
You will need a drill press, a couple of drill bits, a caliper, a small piece of 1/8 brass tubing, something to cut the brass tubing (hack saw or dremel), 1/32 axle spacers and a new O-ring.
The lathe has two arms (armature supports), one holds the lathe motor, the other lines up with your lathe bit. All we are doing here is moving the motor arm closer to the lathe bit arm so we can fit a slot car armature.
First thing you need to do is to flip the lathe upside down and take some measurements. You need to know the exact center of the existing holes.
Here's what I got from mine (yours should be the same): Holes sizes - outer hole (or the recess for the screw) is 9.42mm, inner hole is 5.33 mm.
Holes distances: The one close to the edge starts at 12.75mm, the second starts at 38.10mm.
The math: outer hole divided by 2 + the starting distance from each hole should give you the center for each one. So, 4.71 + 12.75 = 17.46 (center for hole close to edge) and 4.71 + 38.10 = 42.85 (center for second hole).
Now how much should we shorten the distance between the arms? I simply guesstimated using a slot armature as a guide and came up with 56.30mm (check the pictures for reference).
I picked a 15/64" drill bit for the inner hole and a 15/64" for the outer hole. They are a little larger than the original sizes but this actually helps in case you drill off center.
Remove everything from the lathe base plate, both arms and lathe mechanism.
Now you can drill following those sizes and distances. Be extra careful when drilling you outer hole (recess). I don't have any pictures of this process as I don't own a drill press and I had a friend do it for me.
Put everything back together. Use the caliper to get the motor arm true to the lathe bit arm. Get an armature and try it on. You will notice that the axle channel for the RC armature is to large for a slot car armature.
To fix this cut a piece of 1/8 brass tubing; for size use the length of the axle channel, about 4mm.
Use 1/32 axle spacers to get the armature to fit within the arms. Armature spacers are the same width as the 1/8 brass tube, and won't stop the armature from moving, damaging the winding -- use 1/32 axle spacers.
The old O-ring is to large and won't offer proper tension. You can buy a smaller one at home depot. I got mine from an assortment package and I don't know the size. Check the picture for reference.
That's it. Now all you need to do is follow the lathe directions and it should work ;-).
Note: You don't need to change the lathe bit height. Use the picture bellow for reference.
