Although additive manufacturing can produce the complex geometry components, yet machining is required for the post-processing of imperfect parts generated in an additive manufacturing process. Machining is also required to conduct the repair and maintenance of additively manufactured parts. The current study delves into the CNC-controlled microwave-induced plasma drilling of additively manufactured short carbon fiber-reinforced polylactic acid composites. Effect of varying the initial machining gaps (IMGs) of 1 mm, 2 mm, and 3 mm on the electric field intensity and plasma generation inside the applicator cavity was simulated using COMSOL finite element method. Further, the influence of varying the IMGs on tool wear and prominent hole characteristics, namely HAZ, overcut, and circularity was examined. The scanning electron microscopic images of eroded tools and drilled surfaces were acquired to apprehend the tool wear and material removal mechanisms. The hole characteristics were analyzed using the stereo microscopic images. As per the results, crystallographic anisotropy, thermal ablation, and thermal shock were the prominent tool wear mechanisms. The IMG of 1 mm led to the best quality holes having the least HAZ (18.44 mm2) and overcut (1.98%). Moreover, melting and vaporization were the material removal mechanisms at different IMGs.