A compact oldham-type floating reamer holder with holder and reamer portions which transfer torque therebetween via a floating member. The floating reamer holder includes an elastic element which axially biases the holder and reamer portions. In an operative position, the floating reamer holder is configured to automatically enable angular misalignment, parallel misalignment and axial translation between the holder and reamer portion axes. In a non-operative position, the reamer portion axis is co-aligned with the holder portion axis. And the elastic element at least partially overlaps the reamer portion.