During the initial part of its takeoff roll, the airplane experienced an engine failure. Uncontained engine debris from the front compressor front hub (fan hub) of the #1 (left) engine penetrated the left aft fuselage. Two passengers were killed and two others were seriously injured. The takeoff was rejected, and the airplane was stopped on the runway. The fan hub had fractured through a tierod hole and blade slot. Some form of drill breakage or drill breakdown, combined with localized loss of coolant and chip packing, had occurred during the drilling process, creating an altered microstructure and ladder cracking in the fan hub. Drilling damage extended much deeper into hole sidewall material than previously anticipated by P & W. Fatigue cracks initiated from the ladder cracking in the tierod hole and began propagating almost immediately after the hub was put into service in 1990. The crack was large enough to have been detectable during the last fluorescent penetrant inspection at Delta. Delta's nondetection of the crack was caused either by a failure of the cleaning and fluorescent penetrant inspection processing, a failure of the inspector to detect the crack, or some combination of these factors.