So lets see how this might work. I'm going to show one way then a slight variation for a couple of the steps. I hope this is not to confusing but lets try it and see how it goes.
Step 1. Lower the bit to the surface of the work piece and lock the quill. Make sure the bit just touches and keep in mind this is the "zero" point so the better you get this the better the end results.
Step 2. Next the stop collar is slide up to touch the head stock and locked in place. Be careful when you remove the work piece from under the just touching bit.
Step 3. Select the depth you want to cut. Here I used a setup block but a drill bit or leaf of a hinge that you want to have be flush, it all works.
Step 4. Set the depth stop on the shopsmith to zero. Again make sure it is tight and rotated tight as well.
Step 5. Unlock the quill and make sure it retracts to the stop collar. At this point you have set the plunge depth.
Next you can test what you have done by routing a test piece. To do so locate the bit at the starting point and yes make sure you have a fence or something to work against. Turn on the shopsmith and lower the bit into the work piece and make your cut. I like to plunge and lock the quill but I have seen people just hold the lever and cut with one hand on the stock.....
So that is how it works. Now if we want to make a small improvement you can go back to step one and add a known thickness bar on top of the work piece and set the "zero" location.
Just remember that when you set the plunge depth to include the same part to make it all work out.
Got questions ask away. I do hope it was clear enough that most people didn't get lost as this is a new concept for a lot of you.