I have a Hitachi DV 18DCL2 cordless drill that smoked, The main armature had shorted out. Found an exploded diagram on the web, and a new armature for about £20.
Smoke usually means a short circuit somewhere and you can often smell it on the problem part.
My view is: if its no good as it is, then take it apart and see if its fixable. Its a win win situation. If you fix it - Great! If you don't fix it you have learnt something!