Fast electrical discharge drilling is broadly used to manufacture small holes on molds, dies, filters, and automobile and aerospace components. Breakout is the event when the tool electrode reaches the opposite surface of the workpiece. When a breakout happens, the machining efficiency drops sharply and the process becomes unstable. To gain a deep understanding of the breakout process, this paper observed the gap phenomena before and after the breakout with cameras through a quartz glass flake. Experiments were conducted on the workpiece tilted to 45 deg. From the observation, it was found that the deformation of the electrode was not negligible. The electrode would vibrate or shake before and after the breakout. Side-gap sparks were common in the process, and even more were observed after the breakout. The fluid flow in the discharge gap and the side gap did not vanish immediately when a breakout happened and could still evacuate debris for a short period. The debris gradually accumulated as the fluid flow in the gap vanished. A series of simulations were conducted to study the fluid flow and debris movement after the breakout. And simulations were also performed to find the influence on electrode vibration of high-pressure flush fluid and discharge location. The results of simulations agreed well with the observed phenomena. From the observation and simulation results, the deformation or vibration of the electrode and the accumulation of debris were found to be the main factors that led to the low machining efficiency after the breakout.