That should work, yeah. Then you can do your work into the hole, and most of the dust never goes airborne.

I just do it outside.
Dremel was the best tool I ever bought, I dremelled the hell out of resin, 12" dolls, vinyl minis...burnt out a lot of grinder heads too since grinding is what I seem to use it for most.
I never use mine as a drill because I've melted the drill heads onto a number of toys because the drill heads heat up and melt onto the plastic/vinyl....best to buy a drill for that if thats what you're doing.