Tool for drilling a borehole and method for using such tool. The tool has an apparatus for determining a change in a drilling environment around the borehole that includes a source for generating neutrons to produce a radioactive isotope in a fluid flowing down inside the tool; a detector for detecting a change in gamma-ray radiation created from decay of the radioactive isotope when the fluid flows back up outside the tool; and means for relating the detected change in the gamma-ray radiation to the change in the drilling environment that includes borehole enlargement, fluid loss from the borehole and/or fluid entry into the borehole.