CAT40 Dual Contact Tool Holders made in USA - MariTool
Maritool has everything you need in one place, collets, pull studs etc..
That DNM is a big plus spindle, so if you want to take advantage of it these are the best quality tools that will work on a budget.
For demanding operations I have a few Big kaiser holders, hydraulic, mega double mill chuck, and a few Nikken.
If your doing precision work stay away from Taiwan or worse yet mainland China tools. But if your doing loose tolerances and don't care about .0001" precision almost anything can work. I have a DNM 750II 50 taper. I have some Techniks collet chucks (a good name in Taiwan tooling) and it was a mistake, Maritool are the same price and far better quality.
For drilling Er 16 is fine as all the forces are axial, but the price for ER 16 is nearly the same as ER32. The only real reason to run ER 16 which is very small is to avoid clearance issues..but most work will be best suited in ER32, ER25..and have a few ER16 for tight spots, and an ER 40 for holding 1.000 shanks if you need to.
If you run carbide drills they run 100% better in an expensive hydraulic holder, the same can be said for demanding operations like slotting. Collet chucks you can expect .0005 to .002 runout..with hydraulics you can expect repeatable .000 to .0005" which makes a big difference.