is the template a metric when you bring in the step file?
go to options and look at the units after you open the step if metric featureworks will apply metric HoleWizard holes by default.
inch does inch default.
you may have to set SW to prompt you what template you want when starting a new or imported file.
I have SolidWorks prompt me to load a template when bringing in the step file. I load an inch template. There are no metric settings. After step file is brought in, I check and the units are set to inch. I run diagnostics then feature recognition. The holes always come in metric. Even countersunk holes. I have the "Advanced Controls" in "FeatureWorks Options" set to "Recognize holes as wizard holes".
I'm cornfused. :-)