What are dowel holes?

A good example of dowels and dowel holes are the cylinder heads and block deck. The block has dowels that fit into holes in the block deck. The heads have corresponding holes for the dowels to locate the heads properly on the block.

Another good example of dowels is the bellhousing. There are two dowels in the bellhousing flange of the block that have corresponding holes in the bellhousing of the transmission, to properly locate bellhousing and transmission to the back of the block.