In the case of 1/4-36 the major diameter is .250, to find the pitch of one thread divide 1.000 by 36 which equals .030. Subtract .030 from .250 and your answer is .220, a 7/32 drill bit is .218 which is close enough and is a commonly available drill size. The fact that a 7/32 (.218) is .002 smaller will make no difference, more than likely it will produce a hole closer to .220 anyway. It never hurts to go a few thousands bigger as this reduces the power it takes to tap the hole, tap breakage is also reduced. Never try to tap a hole without some sort of oil, 3 in 1 or motor oil is fine for the occassional use. Special tapping fluid can be purchased from Brownell's and other sources if you are tapping many holes. The benefit is it helps produce better quality threads and prolongs tap life.