Abstract: Nail set hammer with a hand held hammer, a nail set tool, a cover panel, a compression spring and a magnet. The hammer handle has a recessed portion capable of storing the nail set tool. The recess portion is enclosed by the cover panel which is flush with the outside surface of the hammer handle. The cover panel includes a downwardly disposed magnet that holds the nail set tool in place within the recess. The cover is attached to the handle by a hinge pin so that when a person presses on the end of the cover panel, the nail set tool is lifted from within the recess so that it can be removed by the user. The nail set tool can be easily removed and replaced from the recess by the user without undue interruption of the nailing or nail setting operations being performed by the user.