A DIY "containment" box to prevent dust and particles from escaping into the room when you're sanding fine items. Brilliant! This would also serve to prevent any accidents should a curious kitty decide to investigate what you're doing. Unlikely, I know - drills are noisy, but I've always been paranoid about my furballs' safety.
How to Use a Dremel / The Dremel Bit Guide (this post is great for figuring out what bit to use on a project-- plus it gives you ideas on what to do with your Dremel tool)