I assume I would drill a pilot hole before drilling the size of a hole that is about the size of this '0' (only round instead of oval and a little bigger). So what kind of drill bit would be best to use? I have both a Dremel drill and a bigger drill. The brass sheet being only 1mm maybe any kind would do.

 

Brass is soft, I don't see this being tough for you.

 

If you need to exactly position the hole I'd center punch it first with either a punch or sharpened nail. The punched dimple will help your drill start exactly where you want without walking off. But if it doesn't have to be really accurate just go at it with a drill. Brass is soft and really easy to drill. Up to 1/4" (5mm) can be pretty easily drilled without a pilot drill but starting with a small diameter pilot drill and working up in size never hurts.

I've never seen a Dremel drill. Their rotary tools probably turn too fast even on the slowest setting. You want something more like a traditional pistol grip type drill. Turn the drill at a medium speed and pressure. If you see two nice curls of metal coming out of the drill you're doing it perfectly.

 

Brass that thin is easy to distort by drilling. The best approach is to use a punch, but assuming you don't have one, sandwich the brass between two pieces of wood clamped tightly together, and drill through that way. It will help keep the metal from distorting. You can drill a pilot hole through the top piece to help line up the proper location.