Why thread milling is different from tapping
Thread milling cuts a thread by moving a rotating tool in a helical path around the inside of a pre-drilled hole rather than driving a tap straight in. That approach avoids the broken-tap risk that comes with tapping, especially in blind holes and hard or gummy materials, and one thread mill can cut multiple thread sizes simply by changing the programmed helical path instead of needing a different tap for every size.
How the numbers are calculated
Helical interpolation diameter, the diameter of the circular path the tool center follows, equals the hole diameter minus the thread mill diameter, since the tool center has to stay offset inward from the hole wall by the tool radius. Effective feed rate uses the same core relationship as any milling operation: spindle RPM multiplied by the number of flutes, multiplied by feed per tooth.
Practical tips
Because the tool is cutting on a curved path rather than a straight line, many controls need the programmed feed rate adjusted for the helical interpolation ratio to hit the correct actual cutting feed at the tool edge, particularly on small-diameter holes where the difference between the tool path and the tool center path is proportionally larger. Check your control's canned cycle or CAM post-processor documentation for how it handles this adjustment before assuming the raw feed per tooth number programs correctly as-is.