I’ve tried adn tried but can’t form a rectangle of copper on the pcb layout. 
Which tool should I use, and can you make any rectgangel adn then edit the dimensions (to 2.5mm x 8.0 mm)?
Can you set the grid to be spaced at 3.96mm?
I’vre used all sorts of software packages for decades, but this has me stumped!
Time for bed.
Thanks
Well, you have to think of the machine the manufacturer is using:
it’s a vertical drill/mill/engraver, meaning a vertically rotating cutting tool. So how should a rotating tool make a sharp inside corner? Answer: it can’t. A laser cutter can, but that’ll add considereable cost to your PCB.
The solution is called “Designing for Manufacturability” (meaning you’re responsible).
That is where “dog bones” come in: make inside corners like this:
In practice, expect a mill diameter of 2 mm, so give the cutouts a radius of 1 mm (contact the manufacturer for exact preferences).
This will save you lots of back-and-forth when sending design files.
And even if a rounded inside corner is OK for your design, then draw it that way.
BTW: this would be a really cool feature when working on the Edge Cut layer: a DRC warning on inside corners with associated help text. I haven’t checked the plugins, perhaps it already exists?
Are you sure your spacing between centres is 3.96mm (0.156")?
This is an old hand laid out board. It is probably laid out in Imperial. To get a more accurate result, measure from beginning of pad 1 to beginning of pad 28 and divide by 27. Try both Imperial and Metric. See the cyan arrow and purple information. Looking at your photo, I’d suspect the pads to be 100 mil wide with 150 mil between centres.
To change Grids:
Green arrows give Metric or Imperial
Left click the rectangle displaying your grid (where magenta is pointing) and a list will be displayed.
At the bottom is “Edit Grids” (red arrow). Click on this. A new window will open. See the below screen grab.
At the bottom of the list of grids in this new window is a + sign, two arrows and a bin. Click on the + and another new window titled “Grid Settings” will open.
You can have different grids for horizontal and vertical, but for this project, different grids are not needed, so tick the box “Linked” and type in the new grid you require into “X”. NOTE: The unit type being displayed and entered depends on the green arrow selection in the above screen grab. (I have mils selected, see above, so any grid I currently enter is in mils.)
Additions and removals of grids can also be accomplished by opening Preferences and selecting Grids in each of the four Editors. Grids are independent for each Editor.
After a:
paul@cezanne:~$ git clone https://github.com/anotherlin/tek_tm_ext.git
and then extracting the KiCad project, and opening / converting it in KiCad V8 I do indeed see a pitch of 156mils. [3.9624mm]
Now, that’s weird:
25.4 * 5 / 32 = 3.96875
I guess those 5um don’t matter much over the total width It accumulates to:
27 * (3.96875 - 3.9624) = 0.1714499999999961
The project itself is an extender board / cable for the TM500 It’s mostly connectors:
It also has some voltage detection / monitoring circuit:
I’m not sure what that is for.
Another website also confirms this pitch:
https://w140.com/tekwiki/wiki/TM500_Series_plug-in_interface
Mechanically, the interface is a direct card-edge connector with 28 contacts on either side, at 5/32" (~0.156" or 3.96 mm) spacing. The connector can be keyed in several places, the plug-in boards have matching cuts between contacts (see below).
Thanks Paul.
So the connector is based on 32nds of an inch and not 10ths as I originally suspected.
32 parts to an inch and 12 inches to a foot and 3 feet to a yard and 22 yards to a chain.
Ahhh!!! The Banana System of measurements is so uncomplicated. 
Anyway, @JohnBB should be able so set up a suitable grid now.
Or he just uses the connector from the project linked above.
Or takes the whole project and just modifies it a bit…
The EEVblog link below also has links to ready made extender cables.
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Seems like a great idea to me! 
So he will be able to create grids in his next project.
Oh wow! That board [above] is intended for exactly what I have! (slightly different objective, but no matter. )
(I did mention Tektronix 500 series, and the weird-looking pitch right at the beginning, but I know how everyone dives into the detail without reading the title, I do it myself. )
At GitHub - anotherlin/tek_tm_ext: Tektronix TM500/TM5000 extender
the maker of this board mentions this:-
" The complete Kicad project is available at [[removed so I can post this replly]] . You will need pointhi/kicad-footprint-generator for running the Python footprint generation script (code is a bit ugly, I’m a Python noob, sorry). "
I have no idea, but I thought I’d flag up the footprint generator in case it is useful to anyone here.
If you’re interested:-
The edge connectors (that receive boards such as this, with the 3.96mm pitch) are readily available, and must (I think) have been quite a common standard a while ago. This Tektronix gear dates from the '70s and '80s.
Also used in the gaming industry:
JAMMA stands for Japan Amusement Machine and Marketing Association who in 1985 created the JAMMA wiring standard. This allowed all Arcade Cabinets that were wired in the JAMMA standard to run any game built to this standard. Since Japan designed most of the newer games in the 90’s the JAMMA became the standard by default.