In this paper, we introduce a desktop-size 3-axis milling machine and a CNC system which was developed to operate the 3-axis milling machine. The 3-axis milling machine has a mini-desktop size of $200{ imes}300{ imes}200;mm^3$ and its cutting volume is $20{ imes}20{ imes}20;mm^3$. The vertically installed XY stage is driven by voice-coil motors, and for the z-axis, a magnetically preloaded air bearing and a linear motor are used. The air spindle runs at up to 160,000 rpm. The gravity force is acting on the y-direction, so a weight balancer using an air bearing cylinder is installed to cancel out the gravity force acting on the XY stage in the y-direction. The CNC system designed for the 3-axis milling machine consists of two parts. The one is a graphical user interface program which runs under Microsoft Windows and the other is a DSP program which is implemented on a DSP board with TI TMS320C6701 chips. A G-code interpreter is included in the CNC system which can interpret and interpolate a basic set of G-codes and M-codes in real-time. To improve the performance of servo control loop in the CNC system beyond the traditional PID-type control, several modern control algorithms have been tested including $H_{infty}$, control, input shaping control, disturbance observer and cross-coupled control on the 3-axis milling machine. Experimental results show the effectiveness and drawbacks of each control scheme when they are applied to the 3-axis desktop milling machine.