Use the offset command. First, select your line/circle/polyline/whatever, then do:
Edit -> Copy Entities -> Offset
You can now enter the offset distance into the toolbar at the bottom, which should equal the radius of your tool (so use 1/8 for 1/4" tool), then click on the side of the line that you want the offset to be produced on to create it. Simple. For complex polylines, don't forget to explode the offsets beofre you convert to DXF, as ace converter will go a bit loopy otherwise, coz it doesn't seem to like p-lines!