I used dial bore gauges in industry a lot for decades, all of ours read in .0001". I am amazed by how many folks building engines on youtube, actual full time shops with some fairly high end equipment are all using dial bore gauges that have a .001" indicator on them..they are guessing at the .0001". The better shops according to my rating have purchased a gauge ring in the sizes they use a lot rather than setting the dial bore gauge with a micrometer. In a production shop trying to check the gauge as often as you should using a micrometer is kind of a PITA, and training a person how to do that is tougher.
There is an axoim that your measuring tool should resolve to 1/10 of your total tolerance on the hole size.
I know it comes at a premium price but the CNC Rottler machine that fully automates the process of honing for size with diamond stones and then quickly putting plateau finish on with a finer diamond stone will net the best job IMHO. The older stuff CAN do a good job but it requires a LOT more operator input to get a result that is close to as good as the CNC Rottler result.
A friend of mine worked at a well known and respected shop in Toledo, OH a few years out of high school, he saw the guy ripping people off on engine balancing by just drilling a few existing holes in a crankshaft a bit deeper, he did not actually balance anything, it was for an AMC V8 which the shop owner thought was junk so not worthy of a real engine balance, but he was willing to CHARGE a guy for the work.
Bill