We report our experimental observations of controlled electrical discharges in an aqueous electrolyte solution over a wide range of concentrations, voltages, flow types, and electrode contact forces. The results show that the electrical discharges in electrolyte are surrounded by a form of shock wave, which plays a significant role in the mechanism of metal removal in such a process. The surface finishes attainable in the experiments are found to be sensitive to the characteristics of the shock wave and the relative phase proportions of electrochemical machining (ECM) and electro-discharge machining (EDM). We analyze the fundamental features of the process that combine both ECM and EDM and present theoretical calculations to quantify the amount of metal removal in the combined process.