Yes, people have removed the protection circuit from the battery, thus removing a very useful safety feature.
I understand there is a small circuit under the pos cap of the protected battery.
No, that is the PTC material, another safety feature of these cells.
Anyone ever tried to drill one through and connect it directly to the cap bypassing the circuit.
No, because if you did that, you'd get a face full of fire.
Why...well, I understand they limit the current output max....not always a desirable feature.
Why? Do you WANT your cells to explode from pulling too much current from them?
Just wondering if I could do this if I might be able to put to good use some cheap Ultrafire batteries in my Green lasers that require a high discharge rate battery to get top performance.
You might be able to. You also might be able to burn that green laser and your house with it too. Ultrafire cells are already a gamble, why increase the risk by removing the protection circuit? Just buy one or two good cells for your better lasers. If your ultrafires can't power your laser, chances are it is because of dreadful voltage sag when the cell is loaded. That is an indication of a very old cell, or an 'abused' cell.
AW, Callie's customs, redilast, these sellers are known for taking new, name-brand cells and rewrapping them along with a protection circuit and, in some cases, a positive cap that allows them to be used in lights that might not make a connection there otherwise.