If one of the apertures is really tiny it's probably an NM peep sight. Be carefull drilling though. If the peep you drill gets elongated or off center your two apertures will be off from each other. IOW, when one is zeroed and you flip to the second aperture your POI may be different than expected.
It would be better to order a whole new aperture and replace it.
To zero, set the elevation dial to 0 and it should be bottomed out.
Go to this page and check out all the info on the different zeroing methods.
Also keep in mind that the peeps are set on a screw and that by flipping between the peeps it moves 1/4 click left or right. This can be seen on any sights where the smaller peep hole appears to be off set to the right just a bit.
In my experience I have to zero with the large peep then flip to the small peep. If I do it the other way around and zero with my small peep, my point of impact will be to the right when I flip to the large peep. It just works that way...for me.