The water heater will have a 3 inch diameter vent tube in the center, running from top to bottom. This tube will be cut out and used as the draft tube of the stove. The tool I used to cut the tube is illustrated in photo D .
I used the Rotozip tool to cut the tube from the inside, and close to the ends so as to keep the tube as long as possible. After both ends of the tube are cut, you will have to use the saber saw to cut the hole for the draft tube and remove the tube through that hole. This is illustrated in photos E and F . To recap, the 3 inch tube that used to be the vent for the water heater is now being used as the draft tube for the wood stove you are making.
You will probably need two cutting disks because they wear out quickly.