Deep-hole drilling (DHD) presents significant challenges in experimental investigations due to inaccessibility and complex fluid-structure interaction. A novel mesh-free multi-physics modeling approach is introduced that couples Smoothed Particle Hydrodynamics (SPH) and the Discrete Element Method to simulate transient chip evacuation and investigate failure mechanisms such as chip jamming and drill breakage. This modeling approach enables the detailed representation of dynamic interfaces and boundary conditions in DHD. It allows the transient investigation of the chip evacuation in DHD. Its capabilities for investigating the impact of drill geometry, metalworking fluid (MWF) characteristics, borehole filling states, and MWF supply levels on the chip evacuation efficiency are demonstrated. Furthermore the aspects needed to investigate chip jamming and to model sudden tool failure by drill breakage are analyzed. This requires modeling the deformation of chips, the friction between the involved bodies, and the measurement of the necessary drilling torque. A mesh-free and a mesh-based elastic body modeling of the chips are investigated. The fluid phenomena during chip jamming are analyzed, and limitations of applying the weakly-compressible SPH formulation in modeling DHD are presented. The approach is further extended to modeling drill failure caused by chip jamming by among other things including a failure criterion based on the applied drilling torque.