It's done by drilling individual 1" holes relatively close so they barely do not overlap, then chiselling the remainder, or going in with drill and heavy rasp-like bit to finish the "pocket" for the locking mechanism. Not the preferred way to do it, but if you only plan on doing one a year or something, it's a viable method. Otherwise, spend the dough and buy the proper jig and template.
I should've mentioned it, but make sure you carefully lay out on the door where you need to drill and more importantly where you SHOULDN'T drill.
If it sounds like a lot of work, well...it is.
