These depth stops are equipped with freely-rotating caps, which stop rotating when they come into contact with the workpiece. This effectively indicates that the desired hole depth has been reached, prevents friction marks on the work, and truly makes the task of drilling holes to a pre-determined depth easier.
Set the depth of the hole you wish to drill by measuring from the cutting edge of the drill to the bottom of the plastic cap on the depth stop. Carefully tighten the screw on the depth stop as shown in the illustration and you're ready to go.