This kind of problem often start in the machines battery contact springs. In the sprigs should be bent or be slack for any reason, poor contact will occur causing heating (as you noticed). This in turn weakens the tension of the spring/contact in the drill itself further. Inspect the contact springs and look for discoloration and moulted plastic around it. You must replace the drills battery contacts to avoid this problem from escalating. The battery may be saved if you gently rub the contact surfaces with an abrasive. Check the charger's contacts although they may not be replaceable so you will have to improvise. Do not use a damaged battery with damaged, misformed, or uneven terminals due to the danger of poor contact and overheating.
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