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I trued a set of rubber tires on the tire razor and then set my dial indicator on them to check roundness it varied only .001"

I am impressed.

:banana-dance: Seems to me your dial indicator needs calibration. :banana-dance:

I tried it again a little farther over and it showed .004 and then the opposite edge and it went .010.

The .01 reading was acceptable to me.

I did it again and got similar results with a second indicator and got similar results. The indicator was rock solid. If it is off I do not know what I am doing wrong.

are you sure you are getting it trued all around? you could color it with a white marker and sand it and see if its cutting across the tire, what kind of wheels are you using? did you true them first, are you getting the tire to hot? do you use any thing to cool the tire? how much play is in your bushings?

It was an Ortman tire on a trued aluminum wheel. The dial indicator was mounted rock solid on a super heavy base. The plunger was slightly depressed and then the dial zeroed and the mechanism was turned slowly by hand. I used two different ones and got very similar results. The bushings were tight. I will chuck the axle in my lathe and do it again.

When you are trying to true something that is not perfectly rigid like a tire you will get better results if you do not use too much pressure. If you use a lot of pressure the tire will deform and you will just reduce the diameter without actually truing it.