ABC has strict guidelines for top weight, bottom weight, and side weight. Balls are manufactured with extra weight to compensate for the amount of material removed when drilled. This often time leaves the ball out of spec, which is called a dodo.
The ball is placed on a dodo scale and measured to find out where these weights reside and determine if an additional hole needs to be drilled to make the ball legal.
In addition to making the ball fall within ABC specs, this counterbalance hole can be used to alter the balls reaction. The size and depth are important to ball reaction. Even the core can be clipped to alter the reaction, by drilling deeply into the lower portion of the ball, or drilling at a specific angle to clip the core.
You can learn more about the X-hole on the
Brunswick website, in their drilling specs. They have put a lot of effort into testing to see what different x-hole placements and depths will do. Also Denny Torgerson has a lot of information on clipping cores with the x-hole.