Abstract: A method of replacing an existing buried pipe with a replacement pipe comprising the steps of positioning a drilling unit of the type typically used with directional boring systems, at ground level over the pipe to be replaced, operating the drilling unit to drive and guide a hollow flexible drill stem through the earth and into an open end of the section of existing pipe to be replaced, further operating the drilling unit to extend the drill stem through the section of existing pipe to be replaced and to protrude from its other end, attaching to the leading end of the drill stem a conical back reaming bit, attaching to the trailing end of the back reaming bit a flexible replacement pipe, and operating the drilling unit drill to apply a pulling force to the drill stem and to apply rotational torque to the drill stem, causing the back reaming bit to be driven and rotated laterally into and through the existing pipe, grinding away the existing pipe, and causing the replacement pipe to be simultaneously pulled i