With a tenth indicator inside the boreHow are you measuring this?
To get spuds that fit the bore better than 0.001" pin gauge increments, some guys make their own, but I buy in between pin gauges from MSC
https://www.mscdirect.com/browse/lo...s-X-Minus-Plug-Pin-Gages?searchterm=pin+gauge
I put the tenths Interapid test indicator on the carriage and move the carriage to check for the pin being concentric and parallel with the lathe spindle. This assumes the ways are parallel with the spindle.