Abstract: An improved system for continuously producing wood pallets and the like. The system features improved tool mounts for the nailing tools of a pallet machine which are adapted to position the tools for the attachment of pallet pieces using two degrees of freedom; vertical travel and simultaneous rotation about a hinge point to allow accurate delivery of nails and to rotate slightly in the recoil direction as the tool recoils. The system also uses an improved hold down clamp which features a dampening material to contact the unassembled pieces of the pellet within the fixture to absorb vibration and accommodate irregularities in the top boards of the pallet.