This card's second effect effectively resets its ATK, after halving it to attack directly.
A basic concept of how to use this card's effects to the maximum is as follows:
Main Phase 1: Halve this card's ATK with its effect.
Battle Phase: Attack directly with this card's effect.
Main Phase 2: Use this card's second effect to banish it by sending a card from hand to to the Graveyard. (Ideally, a monster card with an effect that is useful).
Standby Phase: Special Summon this monster and add a Monster Card (even the one you discarded) from the Graveyard to your hand.
This card is perfect for cards that have effects that activate when Sent from hand to the Graveyard or When sent to the Graveyard. NOTE that the second effect cannot be specific to another area. (ie. When sent from the field to the Graveyard) This works perfectly with monsters, because you can reuse it the following turn as well.
"Dandylion" works especially well with this card. Simply discard "Dandylion" and create two Tokens to defend you for the turn. On your next Standby Phase, return "Dandylion" (or any other monster depending on the situation) to your hand and discard it again to create two more tokens.
You could discard "White Stone" to banish this card and recycle "Dandylion", then discard "Dandylion" and recycle "White Stone". Repeat this every turn to swarm with Tokens and add "Blue-Eyes" to your hand, which you can then Summon by Tributing the Tokens.
"Ojamagic", etc... This allows you to thin the Deck by three and still keep presence in your Hand.
"Dark World" monsters: Many have useful abilities when discarded and all can be returned for additonal uses.
Discard "Broww, Huntsman of Dark World" with the effect of "Drill Warrior" to draw 1 card, then add "Broww" back to your hand when "Drill Warrior" returns. This way you can continuously draw a card from the Deck each turn.
By activating this card's second effect you can re-use Limited monsters. This second effect also works well by combining it with "Foolish Burial" and "Dark Grepher" to add dumped cards from your Deck almost immediately to your hand, at the cost of -1 card.
You can send monsters that work better in the Graveyard like "The Immortal Bushi" or "Destiny HERO - Dasher" while also getting a different card in return, effectively gaining more than what you had given.
You can use this effect to retrieve any "Exodia" piece that may have been sent to the Graveyard.
Use its effect that lets it attack directly in combination with "Armor Breaker" to destroy any card your opponent controls.
After destroying a card this way, you can banish "Drill Warrior" and retrieve "Armor Breaker" from the Graveyard next turn, then Summon it and reuse this combination.
In Yusei-themed Decks, Summoning "Dark Bug" allows you to recycle "Drill Synchron" from the Graveyard, which can then draw out "Quillbolt Hedgehog" from the Graveyard to meet the Level 6 Synchro requirement.
You can Synchro Summon this card by using "Quickdraw Synchron" and a "Fluff Token" from "Dandylion". Send "Dandylion" to the Graveyard to Special Summon "Quickdraw", because "Dandylion" is sent to the Graveyard two "Fluff Tokens" will be Special Summoned. Use 1 "Fluff Token" and "Quickdraw" to Synchro Summon this card. Direct attack with this card. Then during your Main Phase 2, use this card's effect to banish this card. Then Special Summon this card during your next Standby Phase, adding "Dandylion" from your Graveyard to your hand, direct attack again with this card, then during you Main Phase 2, use this card's effect to banish itself, and use "Dandylion" as a discard material for this card's effect. During your next turn, do everything again. This will create a mini-loop.
This card works well with "Synchron Explorer", if you used "Quickdraw Synchron" as the Synchro Material Monster. When "Drill Warrior" is Special Summoned via his own effect, add "Explorer" to your hand to repeatedly Synchro Summon "Nitro Warriors" and/or "Junk Archers".
"Level Eater" also works well because you can continually Summon it every turn, since this card's Level is reset when it is banished. Simply have a "Monarch" card and Special Summon "Level Eater" to Tribute it for the "Monarch".
It is ideal to only have one "Drill Warrior" out at a time as you may overextend your field and lose advantage.
Use this card's effect when you have no other monsters. Use "Swift Scarecrow" when your opponent attacks directly and then retrieve it when this is Special Summoned. (This may work better than Tokens or "Level Eater" due to it ending the Battle Phase).
You can use this card to return "Dragunity" monsters from the Graveyard to your hand, in order to Summon and activate their effects again.
"Chaos Zone" can steadily gain counters from this card, yet less than by other means.
"Crane Crane" can resource "Drill Synchron" back for another Synchro Summoning, or an Xyz Summoning along with the -1 card.