Broach what toyvolvo refers to is called a rotary or rattle broach; heres google. Watts or Slater tools probably best known. Very sturdy, commonly used in large ram-type and standard turret lathes
They aren't slotters although could form an opening to that a bore would connect afterward, with a little skillful planning.
What happens; as part rotates and causes a cutter with 1 less edge than desired to bite corners into prebored hole, guided by a hardened template.
I guess, with the tool fed mechanically at a comparable rate, a milling machine would do the same.