A bit holder and an interchangeable bit that can pivot or articulate relative to the bit holder. The bit holder includes a multi-depth socket for receiving the interchangeable bit. The different depths of the socket determine whether the interchangeable bit operates as a straight-on bit or an off-angle bit. An outer sleeve can slide along a longitudinal axis of a shaft to change the depth of the socket. Alternatively, opposite ends of the bit holder have different depth sockets for receiving the interchangeable bit and/or a shank portion. By flipping over the bit holder, the interchangeable bit can operate as either a straight-on bit or an off-angle bit.