I used some 9/32 aluminum tubing I picked up at the hobby store, it has a 1/4" ID.
What I did was cut off some small pieces with a jewelers saw, drilled a shallow, (3/32 - 1/8 deep), 9/32 hole, and set the tubing pieces into the wood with a little CA.
Once set and dry, I rough leveled the rings with a flat file, and then went on with the finish sanding.
Once the sanding was done, I set the 1/4" abalone with some epoxy, let cure, then sanded level, finished / polished off with some 0000 wool.