Water + Metal + Electricity = lots of rust.
In normal situations, your tools and bits will rust over time. The rust can happen from moisture in the air, wet / cold climates, leaving things out in the rain, etc.
This is how to clean them.
I spoke previously about using Rust Erasers to remove rust from tools. Sometimes, you need something stronger.
Evapo-Rust", which I found worked quite well. If you can't find it, there are other brands out there. Swing by your local hardware store and you should be able to find a few different options.
Some will be more environmentally friendly than others, which is something to consider when disposing of the residue. Read the instructions too, because use may vary and some may need to be diluted with water.
Start out by finding a container to soak everything in. You might not want to use the container afterward, so something disposable is good. I used an old CD spindle cover. To save money, find a container that lets you use as little liquid as possible. Throw your bits in, then add the remover.
In other places, you might need to just brush the remover on. Plastic obviously doesn't rust, but residue will often be left behind by parts that do rust. The plastic will only need a brief soak and can be brushed or scrubbed off pretty quickly.
Use an old brush.
In other places, cut your losses... sometimes literally. Rust is like a metallic plague - if you ignore it, it will spread. The below photo of the rusted wire is just from moisture in the air, if that's an indication of how even air can cause rust. (Or just how much moisture has been in my apartment the last month and a half, bleh)
Spools of wire are cheap, and it would be a mess to soak all this. That said, I don't want to throw it all out, so I just pull out a whole bunch and cut it off. Watch out for all the new sharp jagged edges though.
I was supposed to soak things overnight, but things came up, as they do, and it ended up soaking for days. Some of the finish came off my bits, though they seem alright. Time will tell.
The next step is to remove everything from the sludge and not only dry it off, but wipe it down good. Get all the residue off.
You can use paper towels or cloth shop towels. I recommend holding the parts in your paper towel, rather than your hand, so you don't leave finger prints. You'll probably go through a bunch of towels in this stage as it's pretty messy. You may also want to wear gloves, depending on the toxicity of your rust remover.
BE CAREFUL with drill bits and anything else sharp - you don't want to cut yourself.
Now, Evapo-Rust says you can dip parts in it, let them dry, and it protects against rust... I prefer to go another route.
3-In-One" a WD-40 Company brand is a common one. Hardware stores are your source for this or other brands of oil.
Again, use a paper towel or a cloth to rub just a little oil over the metal AND wipe it off. You don't want your parts dripping in oil, but you do want full coverage. Just wipe off the oil afterward and there should be enough residue left over to protect them.
You can reuse the towels here a number of times because they'll absorb the excess oil, which can be used to rub down other parts, rather than constantly using oil from the bottle.
Again, be careful not to cut yourself, hold the part with a towel to avoid fingerprints and use gloves if you like.
A Quick Note on Safety
Always be aware of Hobby Safety steps.
Note the DANGER - Poison warning label and picture on the oil. It's always a good idea to find the MSDS sheets for products - this oil is a bad example, because apparently their website links to the MSDS sheets are broken. (Which might be against the law or break some regulations.)
No worries, Google to the rescue - searching for "3-in-1 oil msds" finds us this pdf containing more information than what fits on the bottle. (Just be aware that Googling Material Safety Data Sheets isn't a great solution, as products often have different components depending on the country they're sold in)
MSDS sheets contain information on what to avoid, dangers, cleanup and treatment options and any other information you might need to know about a product. You'll notice 3-in-One is not a strong poison, can be a mild irritant and nausea inducer, with a slight chance of fire. Included are steps to take if it gets in your eye or swallowed, and what type of fire extinguisher to use.
(Businesses storing chemicals, including cleaning supplies, are generally required to keep these MSDS sheets with them, though often don't / aren't aware of that)
Even the rust remover has an MSDS sheet. It's environmentally friendly, doesn't contain anything harmful, there are no warning labels on the packaging, but there's still a sheet available - just to prove from an industry and safety standpoint that there's nothing to worry about.
The Final Product!
Here we are! Not looking brand new, but looking good and no rust. Luckily all my bits are labelled, which makes putting them back in the right place pretty easy.