Recessed light holes
That is a pretty jagged cut but for the most part, it doesn't matter because the light trim will cover it up and chipping won't occur that far out. Try using a hack saw blade with 32 teeth per inch. You'll get a smoother cut. I use one with a handle similar to the one shown below. You can also get a hole saw but they're not cheap if you're only doing a few holes. If you're a real fanatic for smoothness, you can coat the inside edge with some drywall mud.

(Picture from Walmart.om)