An axis is a direction of motion controlled by the CNC machine control. It can be linear (motion along a straight line) or circular (a rotary motion). The number of axes a machine has determines it's machining capabilities. A 2.5 axis machine really has three moving axes, but only two axes can move together (most machines sold today are full three axis machines). For machining centers, a three axis machine will have three linear axes. A four or five axis machine will have three linear axes as well as one or two rotary axes.
Note that 2.5 versus 3 axis has yet another context. 2.5 axis machining requires that the machine have three axes, but only two axes must be moving simultaneously at any one time. (Simple operations, like drilling and most milling, fall into this category). On the other hand 3-axis machining requires that all three axes be moving at the same time (More complex operations, like the machining of sculptured surfaces required in molds and airfoils, fall into this category.)
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WHAT IS THE DIFFERENCE IN A 2.5 AXIS MACHINE?