The secret to perfectly centred dowels is drilling perfectly centred holes. To centre a dowel, use a special tool called a "dowel center." The dowel centre is a round insert with a sharp point. It is typically used by woodworkers to align and centre dowels after a hole is bored into a corresponding piece of wood. Dowel centring tools come in any size and can match any dowel.
Align and position two pieces of wood in the configuration in which you want them joined. Mark and drill the dowel location with a pencil. Drill the first hole by hand with a cordless drill, brad-tipped bit and dowelling jig.
Place the dowel centre in the hole. It will only go in so far and it will stop with the sharp point sticking out.
Slide the corresponding piece of wood up against the first piece of wood where they will be joined by the dowel. Gently slide it up against the sharp point on the dowel centre.
Tap the board slightly so that the sharp point on the dowel centre cuts a small divot on the piece of wood. This is the exact centre of the dowel.
Drill the hole using the divot as the centre point for the drill bit for a perfectly centred dowel.
You can find dowel centres at home improvement stores. Buy one for dowel sizes such as 3/8 and 1/2-inch, the two most popular dowel sizes.
Be sure that the dowel centre fits tight to perfectly centre the dowel. Always wear safety glasses when working with wood.