A double-face dial indicator with an hexagonal pivoting spigot.

[Mook]

Proper alignment of the indicator body is crucial for smaller diameters and bores, preventing side loads on the stylus. Using a dovetail mount will help if available, but not all indicator holders have the facility to constrain the dovetail mount, and not all indicators have one. The hexagon spigot provides the alignment to keep the stylus travelling directly towards the spindle centerline.
In this video, I have sacrificed space under the spindle nose for simplicity. If the Z-axis space is at a premium, I can use clip-on holders.