This study investigates the effects of input parameters and coating techniques for realizing smooth surface finish on AZ31B magnesium alloy. Response surface methodology was used for predicting the best input parameters. Three kinds of coating parameters were adopted on a H13-D2 friction drilling tool. Lightweight magnesium alloy (AZ31B) of less than 4 mm commonly used in automotive and aeronautical sectors was used as working material in this research. Plasma nitriding, Liquid nitriding and PVD- Titanium coating techniques were used for increasing the tool life. The main focus of this research was to find an optimized coated tool. Surface roughness and time consumption during friction drilling technique was focused in this research. Using ANOVA, it was established that PVD Titanium Nitrided H13-D2 tool is best suited for machining AZ31B alloy realizing a surface roughness of 0.43 µm at 4000 rpm & 50 mm/rev.